On the Challenges and Development of Finance

On the Challenges and Development of Finance

Finance is the study of value judgment and the law of value. It mainly consists of two major fields: traditional finance theory and evolutionary finance theory, and is a product of modern economic society.

Abstract: Nowadays, with the continuous progress of our country's economy, our country's finance is also more and more attention. In terms of the current state of development, the establishment of the system of financial subjects, although very complete, but in terms of its nature, there are still many problems, are in urgent need of the relevant staff to improve. For the challenges facing finance at present, it is more inclined to the mechanism of the subject in its essence and the new layout in the creation of the subject. Only by changing the way of cultivation can we provide power for future development. In this paper, we analyze the current challenges facing finance in depth, and find out the excellent development prospects in the future, so as to create a new framework for the study of finance.

Keywords: Finance in China; Challenges Faced; Future Development Prospects

I. Introduction

The most important discipline in China's economics is finance. There are many challenges in structuring this subject, such as the concepts identified are still vague, as well as the development of the subject is backward. Therefore, the current challenges faced by finance can only be solved by reconstructing a subject structure, using highly qualified teachers, and re-establishing textbooks or journals in academic categories. In its future development, finance must follow the special principles in the cost of capital, and use a discursive system to address the multiple deficiencies in the hide, which can advance the discipline of finance while setting asset pricing. For behaviors such as investment, the improvement of finance is more in line with the financial market, as well as close to daily life.

Second, analyze the challenges facing China's finance

1. The backwardness of the subject theory. At this stage, one of the challenges facing finance in China is the backwardness of subject theory. Due to the ontological connotation given in finance is too vague, resulting in the theory of finance has been very backward, the construction of the subject also tends to lag behind. The layout in finance is not detailed enough and some detailed theories must be added. The economic structure of finance in China includes international finance and related banking, and it is included in the macro research field, but from the perspective of management and business, the study of finance is more inclined to investment and related finance in the micro structure. As far as domestic development is concerned, the establishment of the discipline of finance still requires the traditional system of economics, especially the lack of a clear division of labor between the two sides, resulting in the exploration of finance has been hindered. Through the current phenomenon of backwardness of the theory of finance can be found, the capital market than the traditional progress has been improved a lot, at the same time, but also its structure is also in-depth analysis, so that it builds out of the new financial subjects are more inclined to indirect financing, but so far, it still can not be involved in engineering, and related behavioral disciplines.

2. Content and reality out of line. At this stage, one of the challenges facing finance in China is that the content of finance is out of touch with reality. In the current inquiry in finance has not been able to change in the long-term posture as well as the correct guidance, there is no correct guidance value. The phenomenon of disengagement of change can only be changed by establishing new subjects in finance. For example, in the securities market, only by reducing the current state-owned stocks, constructing the concept of supervision in daily life, and setting up a new guide for legislation to follow, can the relevant contents of the subject research be maintained all the time. However, in the current finance, there is still a lack of correct leading direction and suggestions, even the reference template is not available, thus it can be seen that only favoring the final results of the research, the published articles can not be strongly supported. Led by this phenomenon, the final decision constructed by economists is not very accurate, so that the content in the audiovisual is even more lack of nutrients, resulting in the image of the discipline is affected.

3. Determined connotation is still very vague. At this stage, one of the challenges facing finance in China is that the connotation of the determination of finance is still very vague. With the continuous development of the economy, finance has been stipulated into terminology, so that the current stage of finance does not only contain such a definition, but also lays the foundation for the future direction of the expansion of the subject. For example, in the world of Ross, finance is considered to be more micro-oriented, which in turn expresses connotations of a micro nature, and the capitalist market has made itself more distinctive due to its changes. An analysis of contemporary lexical connotations reveals that word connotations include a wide range of terms, such as finance, finance, financing, and so on. As far as the summary is concerned, the ontological characteristics of finance are slowly manifested as the economic system continues to change, which is perfectly in line with the macro background of the current transition process. Relevant workers divide finance into two main lines, including international finance as well as a special line of research in monetary banking. Under the correct guidance of the state, the practice of finance is becoming more and more in line with the financing under indirect conditions. At the same time, finance incorporates such main categories as money, and thus faces the banking system. According to the survey, it is understood that the theory of finance proposed by our economists is not at all in line with the theory of finance constructed out of the Western countries. When exploring the theory of finance, the Western countries found that its content includes two kinds of financial connotations, such as the special financial structure within the company, and the field associated with investment science. Our economists, on the other hand, categorize finance as the financial management of the company, confusing the connotations of finance and accounting.

Third, China's future prospects for the development of finance

1. Favor the cost of capital. If you want to quickly and effectively solve the challenges facing finance in China, finance must favor the cost of capital in its future development. Finance must fit the cost of capital when conducting research, and turn the cost of capital into the core of finance. Finance can be hypothesized as a business that, after accommodating a certain amount of financing, desires to reap a quick profit, and any profit earned must be within the amount of financing. It is also possible to discount capital so that it becomes a cash flow, since the process of production is inextricably linked to cash flow. It can be seen that the content of finance in our country does not include cash flow, but the cost of its goods is inseparable from the profit gained. The content of finance can only improve the future development of finance if it includes the decision to set investments, exchange the necessary amount of money, and supply the most appropriate amount of subsequent returns. A project can be rewarded in the future only if the mechanism exists in a real sense.

2. Pricing theory and investment science. If you want to quickly and effectively solve the challenges facing our finance, finance in the future development must realize the pricing theory and investment science. As long as a comprehensive understanding of the theory of investment science, master the content of which can be baked in the complex and financial market discount factor, and then use this starting point. For pricing theory and investing science, its content is more inclined to make up for the assorted defects in the system incidental, therefore, the content of investing science must be improved when constructing the discipline of finance. The basis for the improvement of investment science is the pricing theory, the benchmark means of which is the discount factor used, which is also symbolized by the stochastic deployment. Based on the results of the stochastic discounting, relevant workers organize a variety of pricing models and integrate them all into a unified construct. The problems and difficulties in the theory are simplified and solved, and the information is shared when communicating with each other. This approach can not only shorten the distance between the assumptions and the real, but also can correctly guide the future development direction of finance.

3. Expand the company's finance. If you want to quickly and effectively solve the challenges facing finance in China, finance must expand the finance of the company in the future development. In terms of the current development of China`s `status quo, the finance of the company can be categorized as a necessary theory in the micro field, which has a deep impact on the future development of finance in China. It is also because of the defects in the system and the lack of theoretical models that the development of finance in the company has been hindered. Our corporate finance is more inclined to analyze the management, as well as the unique color of the financial market. And the finance in the company in the assumption of the necessary model is also very simple, can build a single-period state of the simple model, more inclined to take a certain content. As a result, the assumed models also do not need to add abstract mechanisms, not to mention the need to have sustaining connections. Finance in the firm can only advance the future of finance if it uses the model of the profile.

Fourth Conclusion

It is well known that China's financial market is still in the development stage, and various forms are constantly undergoing change and transformation. Changed the traditional mode of regulation, to create a more perfect and in line with the market demand of the financial structure. The final outcome of the study of finance is closely linked to the prevention and control of risks, the use of financial instruments, and the protection of the rights and interests of the investing public. In the face of this problem, we must be prepared for a long struggle for the future development of finance, we must meet the needs of the market, configure some relevant financial resources and analyze the real needs of the market, in the development of finance on the basis of the addition of some special content, in order to make the future development of finance more smoothly.

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