Day 71 11-22

Today we had our last official lesson for Chinese culture before our final presentation. The last lesson was on Confucianism and she taught us the values of Confucianism which was Benevolence(仁), Righteousness(义), Propriety(礼), Wisdom(智), Faith(信). Benevolence(仁) is to love people - sympathize, care, respect, help and think for others. Righteousness(义) is the ability to recognize what is right and the moral deposition to do good. Propriety(礼) is the detailed code to conduct oneself as a person. Wisdom(智) is rationality and intelligence and also the ability and concept to distinguish right from wrong. Faith(信) is the key principle to traditional Chinese morality, one have to be honest, act accordingly with words and to keep to their promises.

"With coarse rice to eat, with water to drink, and my crooked arm for a pillow - is not joy to be found therein. Riches and honors acquired by unrighteousness are to me as a floating cloud." -Confucius

After the slides, we went on to have a video session on Filial piety which is another value that was advocated. The video lasted for half an hour and we had to write an essay on our own thoughts of filial piety within an hour. It was on of our graded tests. Then, the teacher showed her last slides which was a farewell and thank you slide and also a round up of all that she taught in class. She was so polite and filled with respect for all of us as she bid her favorite and biggest class of international students goodbye. It was enjoyable that she was able to teach us. Thank you 老师!

On a side note, it snowed yesterday! The whole area was covered in the white snow it was so pretty.

Trees outside the gym

After that the boys went to the gym before heading back for the second class.

For reformation we learnt more on financial markets. We learnt about the money market-where short term financial instruments are traded, capital market-where long term financial instruments like stocks are traded.

In the money market we learnt about the inter-bank loan market, where banks loan each other money in order to meet the reserve requirements. Several features of this loan market is the very high transaction volume, which amounts to billions of dollars. The loan is usually for a short period of time(24hours) so that the banks will not be caught by the financial regulators. And also the loan requires a payment of interest rate even for 1 night which can be 1% or 2% of the few billion loaned.
Another one that we learnt is the Money Market Mutual Fund(MMMF). It is rather safe but requires users to open an account. The interest rates is 2-3.5% higher than the banks rates of 1.5%. This is mainly used as the first platform where internet companies step into the finance sector. For example Ali's yuerbao makes use of this MMMF and promises a 6% return in interest for those people who keep their money in the yuerbao. The interest rate is higher than the 2-3.5% because this is all done through the internet, over-the-counter, and have lesser logistics, administrative costs and the costs for having a physical building.

For the capital markets, the financial instruments traded are treasury bond, stocks and corporate bonds. In China, the government keeps 20% of the county's GDP. The government controls about 101-102 companies which are state owned, which means that they have at least a 65% market share in the company. The teacher believe that China is the richest government in the entire world as a result. Individual investors hardly invest in t-bonds, it is more commonly invested by pension funds and investment companies. Last but not least, the teacher shared on the stock market and the establishment of China's stock markets. In 1990, Shanghai Stock Exchange(SSE) was established. 1991 saw the establishment of ShenZhen Stock Exchange(SZSE) and the most recent one is in 2013, the New Third Market was established. And for this course, we have to write a 3000 word thesis as our test which is pretty interesting.

It was a long and tiring day today so we headed for dinner individually.