The shrinking salaries of China’s financial professionals have made the jobs in this sector losing lustre. Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, commented that such pay cuts may drive away skilled financial professionals, and depress supply of risk capital and other financial services. He said, “[Over time], tech start-ups and the real economy will also suffer if there is fewer risk capital and financial products to support them.” China’s financial industry used to be providing generous salaries to bankers and financial brokers in a push to incentivise performance and internationalise operations. Prof. Chen said that a market-oriented way is better than top-down directives to decide compensation for financial professionals. “China needs to loosen regulations, increase competition to drive down the price of financial services [to benefit people and businesses],” he said.
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- Ph.D., M.A., M.Phil., Yale University
- M.S., Changsha Institute of Technology
- B.S., Central-South University of Technology
Professor Zhiwu Chen is Chair and Cheng Yu-Tung Professor in Finance at the University of Hong Kong (HKU). Professor Chen currently serves as director of both Hong Kong Institute for Humanities and Social Sciences (HKIHSS) and Centre for Quantitative History (CQH). His research covers finance theory, the sociology of finance, economic history, quantitative history, emerging markets, as well as China’s economy and capital markets. Professor Chen was a former Professor of Finance at Yale University (1999-2017) and a Special-Term Visiting Professor at Peking University (School of Economics) and Tsinghua University (School of Social Sciences).
Professor Chen started his career by publishing research papers in top economics and finance journals on topics related to financial markets and theories of asset pricing. Around 2001, he began to expand research beyond mature markets by investigating market development and institution-building issues in the context of China’s transition process and other emerging markets. He successfully led efforts to construct historical financial and social databases from China’s historical archives and has written on economic/social history topics. In 2013, he started the annual Summer School for Quantitative History cum International Symposium on Quantitative History at Tsinghua University and continues to organize them at Peking University, with the goal of promoting quantitative historical research in China and beyond. In 2022, Professor Chen’s Quantitative History of China project was awarded HK$67.32 million (over US$8.5 million) under the Areas of Excellence (AoE) Scheme, marking a new record high for government funding raised for the HKU Business School since its establishment.
Professor Chen has been a member of the HKU Council since November 2018. He is on the board of directors of Bairong Inc. and GigaCloud Tech. He also served on the International Advisory Board of the China Securities Regulatory Commission (CSRC) (2012-19), the Expert Advisory Board for the formation of the China Investment Corporation (2007), and the board of directors as an independent director at Noah Holdings (2013-24), IDG Energy Investment (2016-18), Bank of Communications (2010-18), PetroChina (2011-17), and Lord Abbett China (2007-15). He was on the Board of Trustees of the Yale-China Association, the 12th and 13th Five-Year Plan Advisory Commission to the Beijing Municipal Government, and the Chief Academic Advisor to two 10-episode CCTV documentary series, “Wall Street” and “Money”. He was a co-founder and partner of Zebra Capital Management from 2001 to 2011. In Burson-Marsteller’s 2012 “G20 Influencers” report, Professor Chen was listed as one of the top ten political influencers in China.
Professor Chen is a frequent contributor to media publications in China on topics of economic policy, market development, institutional reform, and historical research. His work has been widely published and regularly featured in major newspapers and magazines in the United States, Hong Kong, China and many other countries. His Chinese books include: How Is Wealth Created? (2005), Media, Law and Markets (2005), Why are the Chinese Industrious and Yet Not Rich (2008), Irrational Overconfidence (2008), The Logic of Finance (2009), 24 Wealth Lectures (2009), Assessing China’s Economic Growth of the Past 30 Years (2010), On the China Model (2010), The Logic of Finance 2: Path to Individual Freedom (2015), Introduction to Finance (2018) and Introduction to Investment (2019). He has recently published a two-volume long history book in Chinese titled Logic of Civilization, that explores a number of human innovations, including mythology or magic and supernatural beliefs, technologies, social structures, cultural norms, religions, financial markets, and the welfare state. He has received research awards including the Graham and Dodd Award (2013), the Pacesetter Research Award (1999), the Merton Miller Prize (1994), and the Chicago Board Options Exchange Competitive Research Award (1994). He has also received a number of book awards in China and Hong Kong, among which are 23 awards for The Logic of Finance in China and Hong Kong, and the best book award from hexun.com for Why are the Chinese Industrious and Yet Not Rich.
Professor Chen received his PhD in financial economics from Yale University in 1990; MS in systems engineering from Changsha Institute of Technology in 1986; and BS in computer science from Central-South University in 1983. He was Assistant Professor of Finance at University of Wisconsin – Madison (1990-95); Associate Professor of Finance at Ohio State University (1995-99); and Professor of Finance at Yale University. He has been an endowed professor since joining HKU in July 2016. In July 2019, Professor Chen was conferred the title of Chair Professor of Finance in recognition of his contribution to finance.
- CCHU9069 Economic Logic of Civilizations: How Human Societies have Innovated to Deal with Risk
- Finance Theory
- Sociology of Finance
- Quantitative History
- Economic History
- Emerging Markets
- China’s Economy and Capital Markets
- “Hedging Desperation: How Kinship Networks Reduced Cannibalism in Historical China,” with Zhan Lin and Xiaoming Zhang, 2023, forthcoming in Journal of Comparative Economics.
- “Quantitative history studies on China: State capacity, institutions, culture and human capital from prehistoric times to the present,” (co-authored with Chicheng Ma) in Zhiwu Chen & Chicheng Ma (Eds.), Asia-Pacific Economic History Review Special Issue: Quantitative Studies on Chinese Economic History, 2023, Volume 63, Issue 2, pp. 128-144.
- Logic of Civilization: How Humans have Innovated to Deal with Risk《文明的邏輯：人類與風險的博弈》. Beijing: CITIC Press, 2022.
- “Production, Consumption, and Living Standards,” (co-authored with Kaixiang Peng) In Debin Ma & Richard von Glahn (Eds.), The Cambridge Economic History of China, Volume 1: To 1800. Cambridge: Cambridge University Press, 2022, pp. 676-709.
- “Banking on the Confucian Clan: Why China Developed Financial Markets So Late” (with Chicheng Ma and Andrew Sinclair), The Economic Journal, 2022, 132(644), 1378-1413.
- Quantitative History Research, Vol 6《量化历史研究 (第六辑) 》, co-edited with Debin Ma and Denggao Long, Science Publishers, China. 2021.
- Quantitative History Research, Vol 5《量化历史研究 (第五辑) 》, co-edited with Debin Ma and Denggao Long, Science Publishers, China. 2019.
- “Social Norms and Household Savings Rates in China,” (with Yvonne Chen and Shijun He) Review of Finance, 2018, 1-31.
- “A Study of Wife Prices in Qing China: How women were used as Insurance Assets,” (with Shijun He, Zhan Lin and Kaixiang Peng) China Economic Quarterly, 1, 2018, 253-280.
- “Usury, Market Power and Poverty Traps: A Study of Rural Credit in 1930s’ China,” (with Kaixiang Peng and Weipeng Yuan) Frontiers of Economics in China, 13(3), 2018, 369-396.
- Introduction to Investment《陳志武金融投資課》. Beijing: CITIC Press, 2019.
- Introduction to Finance《陳志武金融通識課》. Changsha: Hunan Literature and Art Publishing House, 2018.
- Quantitative History Research, Vols 3 & 4《量化歷史研究 (第三，四輯)》, co-edited with Debin Ma and Denggao Long, Science Publishers, China. 2018.
- “Social-economic change and its impact on violence: Homicide history of Qing China,” (with Kaixiang Peng and Lijun Zhu) Explorations in Economic History, 63, 2017, 8-25.
- The Future of Financial Reform《中國金融改革, 未來會怎樣 ?》 (with Yiping Huang and Shusong Ba). Hangzhou: Zhejiang University Press, 2017.
- “A Preliminary Study of Chinese Interest Rates from the Early Qing to the Twentieth Century Based on an Examination of the Historical Database of Chinese Interest Rates (1660 – 2000),” (with Kaixiang Peng, and Weipeng Yuan) Qing History Journal 清史研究, 104(4), 2016, 36-52.
- “Research on Debt Homicide Cases in mid Qianlong and mid-late Daoguang Reigns,” (with Zhan Lin and Kaixiang Peng) Qing History Journal 清史研究, 102(2), 2016, 75-86.
- “On the Past and Future Prospects of Quantitative History Research,” Qing History Journal 清史研究, 0(4), 2016, 1-16.
- “The Asset Management Industry in China: Its Past Performance and Future Prospects,” (with Peng Xiong and Zhuo Huang) Journal of Portfolio Management, 41(5), 2015, 9-30.
- The Logic of Finance 2: Path to Individual Freedom《金融的邏輯 2：通往自由之路》. Xi’an: Northwestern University Press (China), 2015.
- Quantitative History Research, Vol. 2《量化歷史研究 (第二輯 )》, co-edited with Debin Ma and Denggao Long, Zhejiang University Press, 2015.
- “Violent Conflicts in Private Lending: A Research Based on Qing Dynasty’s Homicide Reports,” (with Zhan Lin and Kaixiang Peng) Economic Research Journal經濟研究 (9), 2014, 162-175.
- “Discounts and Investment Performance of Chinese PIPEs,” (with Jinhui Luo) Portfolio Management, 41(2), 2014, 41-56.
- Quantitative History Research, Vol. 1《量化歷史研究 (第一輯 )》, co-edited with Debin Ma and Denggao Long, Zhejiang University Press, 2014.
- “Financial Strategies for Nation Building,” In Joseph Fan & Randall Morck (Eds.), Capitalizing China. Chicago and London: University of Chicago Press, 2013, pp. 313-333.
- “Liquidity as an investment style,” (with Roger Ibbotson, Daniel Kim and Wendy Hu) Financial Analysts Journal, 69(3), 2013, 30-44.
- “Option Pricing and Hedging Performance Under Stochastic Volatility and Stochastic Interest Rates,” (with Gurdip Bakshi and Charles Cao) In C. Lee & J. Lee (Eds.), Handbook of Quantitative Finance and Risk Management. Boston, MA: Springer, 2010, pp. 547-574.
- “A Valuation Study of Stock Market Seasonality and the Size Effect,” (with Jan Jindra) Journal of Portfolio Management, 36(3), 2010, 78-92.
- The Logic of Finance《金融的邏輯 : 當代中國創富之道》. Hong Kong: Commercial Press, 2010.
- The Logic of Finance《金融的邏輯》. Beijing: Modern Press, 2009. Korean version published in 2010.
- “The Mechanisms of Rural Credit Market in Modern China – A Research Based on Raw Documents,” (with Kaixiang Peng and Weipeng Yuan) Economic Research Journal 经济研究 (5), 2008, 147-159.
- Irrational Overconfidence?《非理性亢奮》. Beijing: CITIC Press, 2008.
- Why Are Chinese Hard-Working and yet Poor?《為什麼中國人勤勞而不富有 》. Beijing: CITIC Press, 2008.
- “Development Prospects of Chinese Industries,” In Subhash C. Jain (Ed.), Emerging economies and the transformation of international business: Brazil, Russia, India and China (BRICs) (New horizons in international business). Cheltenham: Edward Elgar, 2006, pp. 155-182.
- “China’s Stock Market in Historical Perspective,” The PB Newsletter, Issue No. 5, July 2006, 29-40.
- “Informational Content of Option Volume Prior to Takeovers,” (with Charles Cao and John Griffin) The Journal of Business, 78(3), 2005, 1073-1109.
- “Stock valuation in dynamic economies,” (with Gurdip Bakshi) Journal of Financial Markets, 8(2), 2005, 111-151.
- “A free press could help China’s economy,” Financial Times, September 20, 2005.
- “Pricing and hedging long-term options,” (with Gurdip Bakshi and Charles Cao) Journal of Econometrics, 94(1), 2000, 277-318.
- “Do Call Prices and the Underlying Stock Always Move in the Same Direction?” (with Gurdip Bakshi and Charles Cao) The Review of Financial Studies, 13(3), 2000, 549-584.
- “Empirical Performance of Alternative Option Pricing Models,” (with Gurdip Bakshi and Charles Cao) Journal of Finance, 52(5), 1997, 2003-2049.
- “Equilibrium Valuation of Foreign Exchange Claims,” (with Gurdip Bakshi) Journal of Finance, 52(2), 1997, 799-826.
- “An alternative valuation model for contingent claims,” (with Gurdip Bakshi) Journal of Financial Economics, 44(1), 1997, 123-165.
- “The spirit of capitalism and stock-market prices,” (with Gurdip Bakshi) The American Economic Review, 86(1), 1996, 133-157.
- “Portfolio Performance Measurement: Theory and Applications,” (with Peter Knez) The Review of Financial Studies, 9(2), 1996, 511-555.
- Awarded the “Economist of the Year 2023” by South Reviews Magazine (南風窗).
- Awarded HK$67.32 million (over US$8.5 million) under the Areas of Excellence (AoE) Scheme for the Quantitative History of China project in 2022, marking a new record high for government funding raised for the HKU Business School since its establishment.
- Conferred the title of Chair Professor of Finance in recognition of his contribution to finance (2019).
- Received numerous research rewards including the Top Graham and Dodd Award for the Best Paper of 2013 in Financial Analyst Journal, the Pacesetter Research Award (1999), the Merton Miller Prize (1994), and the Chicago Board Options Exchange Competitive Research Award (1994).
- Listed with one of the top 50 “Most Cited Articles of All Time” of the Journal of Finance (ranked #42, Empirical Performance Of Alternative Option Pricing Models, with Gurdip Bakshi and Charles Cao, published in December 1997).
- Listed in 2012 “G20 Influencers” report by Burson-Marsteller as one of the top ten political influencers in China.
- Named one of the “10 Public Intellectuals” who influenced China in 2010, by Times Weekly, a national newspaper based in Guangzhou, China.
- Received 23 “Best Books of the Year” awards in various categories and for 2009 in China for his book, The Logic of Finance 《金融的邏輯》.
- Received the First Prize, Hexun Best Books of 2008, for his book, Why Are Chinese Hard-Working and yet Poor?《中國人為什麽勤勞而不富有》.
- Named one of the 20 People of the Year in defending “Public Interest”, 2006, by Nang Feng Cuan magazine in China.
- Professor Chen’s Chinese blog was named one of the Top 10 Blogs in China in the topic area of “Public Interest”, 2006.
Hong Kong is winning back wealthy people thanks to the city’s policy initiatives including tax concessions, top talent visa and residency programs, and the establishment of Family Office Hong Kong. Hong Kong’s assets under management grew 2.1% to HK$31 trillion (US$4 trillion) in 2023. Driven by a strong performance of private banking and wealth management, net fund inflows jumped more than 3 times to nearly HK$390 billion last year. While Singapore stepped up efforts to combat money laundering, it has seen a major shift from the pandemic years since Hong Kong relaxed the quarantine rules and reopened the border with efficient transportation to mainland China cities. Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, said the mainland billionaires’ enthusiasm for setting up family office business in Singapore has waned, as they prefer less government checks to their personal wealth. “If Singapore would do as many checks and tighter regulations as the mainland, then why would they want to go there?” Prof. Chen said.
Investment bankers at China International Capital Corp. are pledging their loyalty to the Chinese Communist Party amid reshaped the business and cultural landscape in China. Prof. Zhiwu Chen, a chair professor in finance at HKU Business School, said, “There has been a political redefinition of finance.” He added, “The future of CICC is that there’s no more CICC in a few years’ time”.
Physical bank branches and ATMs have seen their numbers dwindling as the public embraces e-payment platforms and financial institutions cut costs. Chen Zhiwu, chair professor of finance at the University of Hong Kong, said, “The banks have found it unnecessary to add branches as they reduce costs.” A refocus on mobile payments among other online transactions, he said, “has in effect served to reduce face-to-face services at banks”.
Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, acknowledges this long-standing shift, stating, "This has been going on for at least about 8-10 years," referring to an industrial policy factoring in "war preparation."
Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, emphasises that the key concern is to maintain confidence in the market. While political measures to boost the economy may be well-intentioned, their effectiveness can vary depending on the specific context, economic conditions, and implementation.
Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, commented that gold represented the only safe asset for Chinese consumers to protect their wealth against domestic inflation, asset price declines, as well as uncertainties in the global landscape.
“The November election pressure may force Biden to be more aggressive on the US-China trade front, as this is one issue that American politicians can win easy points,” said Chen Zhiwu, the chair professor of finance at the University of Hong Kong, after Yellen and her Chinese counterparts failed to address some major issues.
To lessen market volatility, Chinese regulators began implementing measures that affected quantitative trading strategies. These included rejecting requests to short sell, conducting on-site reviews of trading operations, and temporarily halting transaction capabilities for some firms. The restrictions had a negative impact on funds that relied on algorithmic models as they prevented executions, recalled loaned shares, and introduced unpredictability that computer systems had not anticipated. As a result, these funds experienced performance disparities when compared to wider benchmarks. Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, shared his views on A-share market regulation in an interview with Bloomberg.