August 3^rd, the international seminar on “Economic and Financial Deregulation, Stability and Rule of Law” was held in Beijing. This seminar focused on economic and financial regulations, the significance of market stability, and the rule of law. Fluctuations of China’s stock market was also discussed.

Present at the seminar were, Christopher Lingle, Visiting Professor of Economics Universidad Francisco Marroquín (Guatemala); MAO Yushi, Honorary President of Unirule; ZHANG Shuguang, Chairman of Unirule Academic Committee; Barun Mitra, Director of Liberty Institute; Ken Schoolland, Director, Entrepreneurship Center, Hawaii Pacific University, Honolulu, Hawaii, USA; WU Qing, Researcher at Development Research Center of the State Council; CHEN Jingwei, Associate Professor, Institute of Finance and Banking, CASS; SHENG Hong, Director of Unirule; ZHAO Nong, Vice President of Unirule Academic Committee; FENG Xingyuan, Professor, Rural Development Institute, CASS；and Wolf von Laer, PhD in Political Economy, King’s College London.

Professor ZHANG Shuguang moderated the first session. He pointed out that China’s marketization was a process of financial deregulation. Even though there have been some progress, but the current financial system featuring entry barriers, interest rate regulations, and consumption financial regulations still distorts the price which is a signal of the market. And this is exactly why this seminar was relevant.

Professor MAO Yushi spoke on “Wrong Financial Policies as an Outcome from Wrong Economic Theories”. In China, due to the influence of Marxist labor value theorem, there has been misunderstanding with the function of financing and its implications. People believe that finance does not create value, and only the real economy creates value. This is not in accordance with the economic theories, which also caused misunderstanding in real life. Therefore, only with correct understanding of economic theories, will the development of finance be on the right track.

Professor Christopher Lingle spoke on “Causes & Consequences of Violations of the Rule of Law by Governments”. Starting with Hayek’s theories, the common law originated from the interaction between difference classes in the society. And by spontaneous order, rules emerged. Therefore, the rule of law will in the long term facilitate the peaceful interaction between people. And due to the coercive nature of the government, including its intervention with finance, the order between people was damaged, which will in turn harm everyone’s interest in the long term.

Professor CHEN Jingwei and Professor SHENG Hong commented the first two speeches. Professor SHENG Hong attributed the economic success of China to the respect for market and rule of law in Deng Xiaoping’s time. This respect was beyond the rational and limited understanding of human beings, which should be recognized by the decision makers today. They should respect the rule of law and the Constitution in order to keep the economic success. Professor CHEN Jingwei thought the fluctuation of China’s stock market required people to recognize the difference between the structures of China’s financial order and that of foreign countries. And a lot more study should be done in this regard.