Steven N. S. Cheung
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Categories: 1935 births | Living people | Chinese Americans from Hong Kong | Hong Kong people | Hong Kong economists | Law and economics | University of California, Los Angeles alumni
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Steven N. S. Cheung (Traditional Chinese: 張五常; Pinyin: Zhāng Wǔcháng; born December 1, 1935), a Hong Kong born economist, specializes in the fields of transaction costs and property rights. He is also the most expensive columnist in Hong Kong. Known for his work on private property rights and transaction costs, he achieved his fame with an economic analysis on China open-door policy after 1980s. In his studies of economics, he focuses on economic explanation that is based on real world observation (i.e. an observation first approach). He is also the first to introduce concepts from the Chicago School of Economics into China. He obtained his PhD in economics from UCLA, where his teacher was famous American economist Armen Alchian. He taught in the Department of Economics at the University of Hong Kong from the 1980s to 1990s. During this period, Cheung reformed the syllabus of Hong Kong's A-level Economics examination, adding the concepts of the postulate of constrained maximization, methodology, transaction cost and property right, most of which originate from the theories of the Chicago school. He is also good at photography and Chinese calligraphy.
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Cheung is one of the famous Chinese scholars in the field of Economics. Unlike modern mainstream economists, his analysis does not rely on advanced mathematics techniques, but relies mostly on basic price theories, including individuals' satisfaction-maximization, law of demand and law of diminishing marginal return. In particular, he stresses on the importance of transaction and institutional costs in his analysis. His theory of share tenancy has enhanced the understanding of contractual arrangement, which was largely ignored by New Classical economists. According to Cheung, sharecropping can be efficient when transaction cost and information costs are put into consideration. This implication is revolutionary for sharecropping was perceived as an inferior arrangement for years. After the publication of The Fable of The Bees, our perception of externalities is no longer the same: as long as corresponding property rights are clearly delineated, externalities can be captured through private negotiation/contract arrangement without government's intervention. In 1983, Cheung published probably his most important journal article, The Contractual Nature of The Firm. While a firm cannot be defined easily, Cheung interprets it as a kind of contractual arrangement being used to replace the market (i.e. price mechanism) in order to reduce transaction costs (e.g. the cost of price searching). Originality of ThoughtsCheung is known for his originality. Nobel Prize winners like Ronald Coase[1] and Joseph E. Stiglitz[2] have acknowledged the contribution by Cheung in their respective Nobel lectures. Contribution to economics and China's economic developmentChueng's contribution to economics and China's economic development can be roughly grouped in the following areas,
Comments on China's modernizationHe had written many books (in Chinese) commenting on China's modernization programs from an economic point of view. In 1980s, Cheung strongly supported an economic transformation of China as a market economy. However, in that decade, China went through serious inflation, leading to strong economic, political and social tensions. However, after 1992, China continued to reform economically. Steven Cheung claimed that most of his predictions have come true. One of his major ideas, the replacing of state owned enterprises by private enterprises, turns out to be very consistent with the direction taken by Chinese political leaders and policy makers. Alleged Tax EvasionOn January 28, 2003, Cheung was indicted on thirteen counts by a federal grand jury. The charges consisted of six counts of filing a false income tax return, six counts of filing false foreign bank account reports, and one count of Consipiracy to Defraud the United States. Linda Su Cheung, the wife of Steven N.S. Cheung, was also indicted on the latter count. The Cheungs were to be arraigned on February 20, 2003. However, they failed to appear. Consequently, arrest warrants were issued. Originally a professor at Hong Kong University, because of the extradition agreements between the US and Hong Kong, Cheung has since then stayed in the PRC, a country which has no such agreements with America. Currently, Cheung lives in Shenzhen. He now still writes books and works as a columnist for a famous Hong Kong newspaper, Apple Daily. Occasionally, he paid some visits to some universities on the mainland and was welcomed by some students there, accompanied by his wife acting as the translator of Mandarin for Cheung who speaks Cantonese and English only. Selling Fake AntiquesFrom 1998 to 2003 Steven N. S. Cheung Inc. owned an antique dealer in Seattle called Thesaurus Fine Arts, which specialized in Asian antique pieces. The store closed when a series of investigative reports in the Seattle Times revealed that many of the antiques were fake, and whose old ages had been certified by a lab owned by Steven Cheung. In 2004, the Washington State Attorney General filed consumer fraud charges against Thesaurus Fine Arts. In 2005 Thesaurus Fine Arts settled for up to $550,000 in fines, attorney fees, and restitution. However, as part of the settlement Cheung himself was dropped from the case. References
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