From a value-based perspective on building a modern financial system, this paper proposes accelerating the establishment of a people-centered modern financial system. Constructing a modern financial system with Chinese characteristics that is people-centered is an inevitable outcome of integrating the fundamental tenets of Marxism with China's specific realities and its fine traditional culture. It also represents a scientific summary and theoretical innovation of the historical experience derived from a century of financial practice under the leadership of the Communist Party of China. The people-centered approach defines the essential distinction between the path of financial development with Chinese characteristics and Western financial models. In the process of accelerating the building of China's financial strength, it is essential to adhere to the fundamental tenets of Marxism and emphasize the political and people-centered nature of financial work. The people-centered principle, being a core value, serves as the guiding code of conduct, fundamental stance, objective, and policy basis in accelerating the building of China's financial strength. To implement the people-centered financial philosophy, it is imperative to actively cultivate a financial culture with Chinese characteristics that integrates the rule of law and the rule of virtue.
The people-centered value orientation holds a primary position in cultivating and building the key core elements of a strong financial nation. Building a community with a shared future for mankind is a logical extension of the people-centered value orientation on a global scale. The value orientation of building a community with a shared future for mankind should be implemented in the cultivation and development of the six key core elements. The modern financial system consists of six subsystems, and in its construction, the financial needs of the people should always be prioritized, empowering them to increase their property income.
Under market economy conditions, if financial institutions solely pursue profits, it may lead to a situation where projects, industries, and regions that urgently require development but lack immediate profitability struggle to receive sustained financial support（particularly funding）, thereby becoming weak links in economic and social development. To address this challenge, it is essential to focus on the five key areas of financial services: technology finance, green finance, inclusive finance, pension finance, and digital finance. Excelling in these five areas represents a breakthrough over the conventional understanding of financial activities in traditional economic theory. Starting from the people's aspirations for a better life, it integrates market mechanisms into the overall requirements for high-quality economic and social development, focusing on long-term growth and common prosperity for all. Currently, significant progress has been made in these five key areas. Moving forward, it is important to uphold the political and people-centered nature of financial work, deepen structural reforms on the financial supply side, and enhance financing support as well as the suitability of financial products and services for major strategies, key areas, and vulnerable sectors.

China's rapidly aging population presents profound and multifaceted challenges to the sustainability and equity of its old-age security system, with the proportion of citizens aged 60 and over projected to exceed 35% by 2050. This study develops a comprehensive analytical framework integrating three fundamental support pillars: self-support capacity（household assets and wealth accumulation）, institutional pension benefits, and intergenerational support capacity（children's socioeconomic status and educational attainment）. Drawing on seven waves（2011-2023）of date from the nationally representative China Household Finance Survey, the research employs sophisticated econometric methods including multivariate regression analysis with fixed effects and joint probability distribution modeling to systematically examine the complex interrelationships and evolving distribution patterns among these critical dimensions.
The empirical investigation reveals a deeply embedded“institutional Matthew effect”, whereby pension benefits demonstrate statistically significant positive elasticities with both household asset levels（coefficient 0.077）and children's educational attainment（coefficient 0.623）. This systematic institutional bias disproportionately favors elderly individuals already possessing stronger economic foundations and more robust family support networks, thereby substantially reinforcing pre-existing socioeconomic inequalities across generations. The comprehensive joint distribution analysis further identifies an accelerating trend of polarization, with the proportion of elderly simultaneously in the lowest tier across all three dimensions increasing from 16.83%（2011）to 24.84%（2023）, while the highest tier group expanded even more dramatically from 19.23% to 33.22% during the same period, indicating widening disparities in overall old-age security capacity.
This multidimensional stratification generates substantial welfare disparities with profound implications for social cohesion. The most vulnerable groups experience unhappiness rates approximately five times higher than the most advantaged and face alarming poverty vulnerability reaching 11.93%, creating significant risks of intergenerational poverty transmission. Carefully designed policy simulations demonstrate that strategically raising the minimum pension guarantee to 750 RMB monthly would most effectively reduce poverty vulnerability by 2.85% while narrowing pension gaps, with a manageable fiscal impact of 11.93% increase in expenditure. However, rigorous sensitivity analysis confirms sharply diminishing marginal returns beyond this empirically established optimal threshold, suggesting the need for complementary policy instruments.
The study concludes that fundamental deficiencies in the progressivity of the current pension design perpetuate inequality through self-reinforcing cycles that demand urgent policy attention. Evidence-based recommendations include enhancing redistributive function through minimum guarantee adjustments and benefit formula reforms, improving coordination mechanisms between social assistance and pension systems with particular attention to rural-urban disparities, and strategically reorienting pension finance development toward vulnerable populations while expanding both the quantity and quality of elderly care service provision. Future research should explore the dynamic interactions between pension reforms and broader social protection systems to develop more integrated solutions for China's aging challenge.

Since February 2022, driven by inflation in developed economies, geopolitical conflicts and the multipolarization of the global reserve currency system, gold prices have repeatedly hit record highs, doubling in just over three years. In October 2025, the spot price of London gold even broke through the historical high of $4,000 per ounce. Gold is regarded as a safe-haven asset due to its multiple attributes such as commodity, currency and finance. Therefore, against the backdrop of continuously expanding openness while simultaneously managing financial security, it is particularly important to focus on the price-setting efficiency of safe-haven assets like gold.
Using the price discovery model that accounts for exchange rates, this paper provides empirical evidence of the price-setting efficiency of domestic and foreign gold spot markets under high-frequency data by comparing the information shares of China's Shanghai gold market and the international gold market. The main conclusions are as follows. Firstly, over the past three years, the price-setting efficiency of China's gold spot market has been lower than that of the international market, while the role of exchange rates in the gold spot market has increased significantly. Secondly, mechanism analysis indicates that price-setting efficiency is influenced by market type and trading session. Specifically, China's gold market exhibits slightly higher price-setting efficiency than the international market primarily during the night session of the spot market and in the futures market. Thirdly, from a long-term perspective, the price-setting efficiency of China's gold spot market is lower than that of foreign markets, though the gap is gradually narrowing. In terms of volatility spillover, the intensity of the volatility spillover effect from foreign gold spot markets is higher than that from the domestic market.
Compared with existing studies, the potential contributions of this paper are mainly reflected in the following three aspects. Firstly, it provides empirical evidence on the price-setting efficiency of domestic and international gold spot markets using high-frequency data. Based on three years of high-frequency gold spot price data, it finds that the price-setting efficiency of China's gold spot market remains lower than that of foreign markets, a result that holds after robustness checks. Secondly, the paper analyzes various perspectives including different market types, trading sessions, the long-term view, and volatility spillovers, further demonstrating the reasons for the lower price-setting efficiency in China's gold spot market compared to foreign markets. The study finds that the price-setting efficiency of China's futures market is slightly higher than that of foreign markets. Thirdly, this paper analyzes the impact of exchange rates on price-setting efficiency using high-frequency data, thereby broadening the understanding of gold price-setting efficiency. The results indicate that the role of exchange rates in the gold spot market has strengthened significantly since 2022.
The findings of this paper provide a policy reference for accurately assessing the development level of pricing setting power for commodities represented by gold, thereby helping to ensure financial security and energy security.

The increasing complexity of global production network has significantly promoted and deepened interdependence among countries, posing new challenges to safeguarding against external imported risks. Against this backdrop, applying a global production network framework to the study of cross-country risk contagion is imperative for effectively mitigating external imported risks.
Based on the stock index data of the top 20 countries in terms of global GDP rankings, this paper employs the LASSO quantile regression method to construct a global tail risk spillover network. On this basis, the world input-output tables are used to construct a global input-output linkage network and to analyze the driving factors behind pairwise tail risk spillovers from four aspects, input-output linkages, return correlation, volatility correlation, and the own risk levels of both spill-in and spill-out countries. This paper also compares forward and backward input-output indicators to explore the main direction of risk transmission.
This paper shows, firstly, the tail risks of countries around the globe are intertwined, and any country can be affected by the tail risk spillovers from other countries. Secondly, the input-output linkage between countries is an important driving factor for tail risk spillovers. This conclusion holds true in the full sample period, the 2008 financial crisis and European debt crisis period, and the COVID-19 pandemic period. Thirdly, tail risks are mainly transmitted from upstream countries to downstream countries along the industrial chain. This characteristic is further strengthened during the 2008 financial crisis and European debt crisis period, but the main transmission direction of tail risks was reversed during the COVID-19 pandemic. Fourthly, the higher the return correlation between two countries and the risk level of the spill-in country itself, the stronger the tail risk spillover between the two countries. This conclusion holds true in both the full sample period and the 2008 financial crisis and European debt crisis period.
This paper makes the following marginal contributions, firstly, it reveals the driving mechanisms of tail risk contagion between countries, providing a theoretical basis and decision-making support for external risk prevention and control. Secondly, it interprets the global tail risk contagion effect from the perspective of industrial chain linkages, and clarifies the main transmission paths of tail risk between countries through industrial chains. Thirdly, it enriches research on the economic consequences during the 2008 financial crises and European debt crisis period, and the COVID-19 pandemic, offering empirical insights for formulating measures to prevent external risks under different shocks.
To improve China's external risk prevention and control system, this paper proposes the following policy recommendations. Firstly, understand the characteristics of global tail risk contagion, and strengthen risk monitoring and prevention for major risk spillover countries. Secondly, incorporate input-output linkage indicators into the cross-country financial risk monitoring system, and identify potential risk transmission channels between countries by tracking trends in these indicators. Thirdly, establish a dynamic risk monitoring system to promptly determine the direction of risk transmission under different conditions, adjust policy measures in a timely manner based on the latest monitoring data, and maintain the flexibility and adaptability of risk prevention measures.

The global financial crisis has profoundly underscored the importance of guarding against systemic risks. Relying solely on monetary policy is insufficient to effectively address complex economic conditions. Integrating macro-prudential policy has become an imperative choice. Commercial banks serve as the nexus within the financial system. Although bank liquidity creation can alleviate corporate financing constraints, enhance the efficiency of financial resource allocation, and positively contribute to economic growth, excessive liquidity may also increase the likelihood of systemic risks. How to effectively guide and regulate bank liquidity creation remains a critical issue requiring in-depth research. Investigating the effects and underlying mechanisms of the two-pillar framework on bank liquidity creation holds significant value for both advancing theoretical research and informing policy practice.
Based on the micro-level panel data from 290 Chinese commercial banks spanning the period from 2012 to 2023, this paper makes three marginal contributions: Firstly, it provides a valuable supplement to the literature on the two-pillar policy and liquidity creation by exploring their relationship and transmission mechanisms. Secondly, it examines the moderating effect of financial openness on the relationship between the two-pillar policy and bank liquidity creation, revealing potential channels that influence the effectiveness of the two-pillar framework. Thirdly, based on the macro-prudential assessment system, this study further investigates the heterogeneous effects of the two-pillar policy on liquidity creation across banks with different ratings.
The main findings are as follows. Firstly, expansionary monetary policy promotes bank liquidity creation, while the concurrent use of tight macro-prudential policy can mitigate this promotional effect. This conclusion remains robust after a series of robustness checks. The results of the heterogeneity tests indicate that, compared to low-rated banks under the macro-prudential assessment system, the regulatory effect of the two-pillar policy on liquidity creation is more pronounced among high-rated banks. Secondly, the tests for the transmission mechanism show that, the two-pillar framework counteracts the stimulative effect of expansionary monetary policy on bank liquidity creation by exerting a dual inhibitory effect on banks' active risk-taking and credit procyclicality, while simultaneously enhancing the forward-looking nature of loan loss provisions. Thirdly, an increase in financial openness generally weakens the regulatory effect of the two-pillar policy on bank liquidity creation. This weakening effect is primarily observed in the factual dimension of financial openness, whereas institutional financial openness strengthens the regulatory effect of the two-pillar policy on bank liquidity creation. Fourthly, further structural analysis indicates that, compared to the liability side and off-balance-sheet activities, the two-pillar policy exerts a more pronounced regulatory effect on liquidity creation related to the asset side and on-balance-sheet activities. Analysis by type of macro-prudential policy shows that, compared to capital-based and liquidity-based macro-prudential policies, the regulatory role of the two-pillar policy is more evident when combined with loan-based macro-prudential policy.
These findings offer theoretical guidance and decision-making references for improving the two-pillar policy framework and mitigating liquidity creation-related systemic risks.

Preventing financial risks has always been a core task of China's financial work, and risk prevention in commercial banks is even more critical. With the advancement of interest rate liberalization reform and the rapid development of digital finance, competition in the traditional interest-based business sector has become increasingly fierce. This has highlighted the trend of diversification among commercial banks, bringing new challenges to risk management. Meanwhile, China's economy has shown cyclical fluctuations in recent years, and bank risks have accordingly exhibited obvious cyclical characteristics, making the impact of diversification on bank risks increasingly complex. Against this backdrop, this paper explores in depth the impact of diversification on bank risk and its cyclicality.
This paper constructs an optimal operational decision-making model for banks under the condition of business diversification for theoretical analysis. Subsequently, it employs panel data of 424 Chinese banks from 2007 to 2023, and combines methods such as HP filtering, dynamic panel SYSGMM, and DID for empirical analysis. The research findings show that: Firstly, diversification acts as a“risk amplifier”and can significantly increase the risk level of commercial banks. Secondly, from the perspective of specific directions, diversification driven by transactional business significantly elevates bank risks, while the impact of diversification driven by fee and commission business on bank risks is not significant. Thirdly, from a cyclical perspective, diversification functions as a“cyclical stabilizer,”significantly weakening the cyclical characteristics of bank risks. Fourthly, as market competition intensifies and banks' net interest margins narrow, the impact of diversification becomes more pronounced. Fifthly, the“risk amplifier”effect of diversification is more evident in banks with smaller asset sizes, lower management efficiency, and poorer quality of credit assets; in contrast, the“cyclical stabilizer”effect is more prominent in banks with larger asset sizes, higher management efficiency, and better quality of credit assets.
This paper makes the following marginal contributions. Firstly, theoretically, this paper innovatively constructs a model of optimal operational decision-making for banks under the condition of business diversification, enabling a more accurate analysis of the mechanism through which diversification affects bank risks and their cyclicality. Compared with existing studies, the model expands the types of banking businesses into three categories: deposits, loans, and non-interest businesses, which is more consistent with the actual situation of bank diversification. Meanwhile, this paper incorporates banks' risk conditions and reveals the game mechanism between risk-enhancing effects and risk-diversifying effects in diversification. Secondly, existing studies have not paid adequate attention to the impact of diversification in different directions on bank risks. This paper explores this issue from the perspective of business diversification directions, providing new theoretical basis and practical guidance for banks to optimize business layout and precisely control risks. Thirdly, although bank risks exhibit obvious cyclical characteristics, existing studies have not considered the impact of diversification on the cyclicality of bank risks. This paper analyzes this issue from a cyclical perspective, expanding the research boundary in the field of bank diversification and risk cyclicality.

Improving the willingness and scale of overseas entities to allocate renminbi（RMB）assets is an important channel for promoting the internationalization of the RMB. At present, increasing the scale of cross-border RMB asset allocation still faces multiple challenges, changes unseen in a century are unfolding at an accelerating pace, geopolitical competition is intensifying, distrust of China is increasing significantly in some countries, and the political distance is widening markedly. However, little literature has examined the impact of political distance on cross-border RMB asset allocation. Building upon theoretical analysis and utilizing RMB asset data held by 48 economies from 1990 to 2023, this paper employs United Nations General Assembly voting data to measure bilateral political distance and systematically examines the impact of political distance on cross-border RMB asset allocation and its underlying mechanisms, further investigating the diversion effects of cross-border RMB asset investments.
The results show that, firstly, the widening of political distance significantly inhibits foreign economic entities from increasing their holdings of RMB assets. Secondly, the impact of political distance on cross-border RMB asset allocation varies among different types of countries. The negative effect of political distance is larger in developing countries, countries that have not signed bilateral currency swap agreements with China, countries with low trade dependence on China, countries with lower levels of financial development, countries with close political relations with the United States, and countries with high capital account openness. Thirdly, political distance primarily inhibits cross-border RMB asset allocation by exacerbating exchange rate volatility, weakening value chain cooperation, and reducing cultural integration. Fourthly, the signing and upgrading of Free Trade Agreements（FTA）can mitigate the obstacles of political distance to cross-border RMB asset allocation. Fifthly, there is a diversion effect on cross-border RMB asset investment. When a country's political distance from other countries（excluding China）widens, it tends to allocate and hold more RMB assets.
In the process of prudently and solidly promoting the internationalization of RMB, China should strengthen bilateral and multilateral political dialogues and cooperation, focus on improving the position in the global value chain, actively promote people-to-people diplomacy, steadily advance the reform of the RMB exchange rate formation mechanism, foster the innovation of RMB financial products, and actively promote the negotiation and upgrading of FTA.
The main contributions of this paper are as follows. Firstly, it incorporates political distance into the analytical framework for cross-border RMB asset allocation, providing novel perspectives for studying cross-border RMB asset allocation and RMB internationalization. Secondly, it identifies how political distance affects cross-border RMB asset allocation through exchange rate volatility, value chain cooperation, and cultural integration, providing new insights into the impact of geopolitics on RMB internationalization. Thirdly, it examines how FTAs moderate the effect of political distance on cross-border RMB asset allocation, addressing the lack of studies on mitigating the negative effects of the expansion of political distance.

Against the backdrop of increasingly stringent leverage ratio constraints and capital buffer requirements faced by global banks, cross-border loan positions have contracted significantly, while securities capital flows predominantly driven by non-bank financial institutions have progressively gained prominence in cross-border capital movements. As the world's largest developing economy, China has been accelerating the opening of its securities market. However, amid the continuous expansion of China's cross-border securities investment scale, issues such as cross-border fraud, financial falsification, illicit fund transfers, tax evasion, and regulatory arbitrage have persisted. The fundamental tension between the territorial principle of sovereign supervision and the borderless nature of securities capital flows has made inter-regulatory cooperation particularly challenging.
The Central Financial Work Conference in 2023 emphasized the need to“promote high-standard financial opening-up”and“comprehensively strengthen financial regulation.”The essence of financial regulatory cooperation lies in the institutional arrangements and international coordination among countries in the financial regulatory domain, constituting a fundamental practice of institutional opening-up. Particularly, as traditional channels of securities capital flow face multiple external global shocks, investigating the impact of international financial cooperation models centered on institutional coordination on cross-border securities investment holds significant policy implications for China.
This paper conducts an empirical investigation into the impact of financial regulatory cooperation on cross-border securities investment, utilizing bilateral securities investment position data from 79 home countries to 172 host countries spanning 2001-2023. The findings demonstrate that establishing financial regulatory cooperation between two countries significantly promotes the scale of bilateral cross-border securities investment, and this conclusion remains robust after a series of endogeneity and robustness tests. Mechanism analysis reveals that financial regulatory cooperation facilitates bilateral cross-border securities investment through enhanced market transparency between cooperating countries, reduced investment environment uncertainty, and promoted regulatory convergence. Heterogeneity analysis indicates that the investment-promoting effect of financial regulatory cooperation is more pronounced when the capital type is debt capital, when host economies are developing countries, and when significant disparities exist in financial development levels or institutional quality between home and host countries. Extended analysis further reveals that financial regulatory cooperation not only enhances securities investment stability between cooperating countries but also maintains considerable resilience in its promotive effect on cross-border securities investment amid global shocks including heightened geopolitical risks, global financial cycle contraction, and increased U.S. monetary policy uncertainty. This research provides empirical evidence to support China's efforts in strengthening financial regulation and governance capabilities while steadily advancing high-standard financial opening-up.