Background

Yale’s intellectual engagement with China’s financial development dates back to the 19th Century, when Yung Wing, famous Chinese economic reformer and 1854 graduate of Yale College, proposed the joint-stock financing of a domestic Chinese steamship transportation company to the governor of Jiangsu province in 1867. His vision became the basis for China’s first domestically-owned modern corporation, The China Merchant’s Steamship Navigation Company, and the beginnings of a stock market in China.

China today shares some parallels to China of the 19th Century. While the country in the 21st Century is one of the world’s great political powers, China is undergoing dramatic economic, legal and other institutional changes. Like a century ago, China is one of the world’s most important producers of goods for the world market. Like a century ago, China is engaged in the process of globalization on all fronts: economically, legally, socially, culturally and financially. China’s financial innovations, in particular, hold the possibility to transform Chinese society for the better – to provide an environment for productive allocation of capital, to allow China’s savers to prepare for their future, to allow China’s businesses to tap the vast financial resources of its own citizens and the world’s investors, and to eventually transform China into a modern democratic society.

We believe that, at this moment in history, the intellectual analysis of market development experience in China, and comparison to related experiences in other nations, may provide great benefits to China, the U.S. and the world. While no country has ever been through precisely the changes China now confronts, the knowledge provided by academic thought – free from any commercial and governmental interests – has great potential value.