We examine empirically whether financial reform in China since 1994 has reduced the lending bias that operated in favor of state-owned enterprises (SOEs) and against non-state-owned enterprises such as collective-owned township and village enterprises (COTVEs), in the manufacturing sector in Wuxi City, Jiangsu province. The reforms did not reduce the lending bias, though they probably improved the efficiency of allocation of funds within COTVEs. Liquidity constraints faced by enterprises affiliated to a business group in Wuxi City were not reduced, but after 1994 collateralizable assets became particularly effective in giving COTVEs better access to external finance.

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The price fluctuation in China has been very sharp since economic reform and the open-door policy were introduced in 1978. What has caused the price fluctuation in China? Is it based on the factor of the goods market， or is it based on the factor of the money market? In order to maintain price stability in China， what monetary policy will be effective? In this paper， bearing the above issues in mind， the price fluctuation in China after economic reform was first surveyed. Then the cause of the price fluctuation in China was analyzed, making use of the P* model which analyzes the pressure of the price fluctuation from both sides of the money market and the goods market. Finally， the management of an effective monetary policy in China was considered. This empirical analysis showed that not only monetary factors but also real factors have a significant influence on the price fluctuation in China. In the management of the monetary policy which should aim at price stability from now on， it is indispensable to tum one's eyes not only to changes in the money market but also to those in the goods market. In addition, since the interest rate is not significant in the estimation of the money demand function， in order for the interest rate to function as a means of monetary adjustment from now on, the liberalization of the interest rate is necessary.

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In recent years, the listed companies in China are obligated to introduce the independent directors as their monitors. With regard to internal monitoring system, both the supervisory board and the chairman of the board of directors have coexisted in the board system in Chinese stock companies. It follows that the independent directors are to be the third monitor in the board system. It is, therefore, critical issue to clarify each role and function as a monitor among these three players: 1. Since the independent directors have very little time to work in company and lack information concerning the company, it is difficult for them to perform the function of financial audit. Therefore, it is appropriate for them not to share the role of financial audit, but to perform monitoring about the appropriateness of decision-making of board of directors and the execution of the management duties. 2. The chairman of the board of directors should not monitor but be monitored, because he/she is the chief executive. It is desirable to shift his/her monitoring function to the independent directors. 3. Also, the supervisory board is not able to carry out the function of the appropriateness audit in decision-making of the board of directors, because it doesn't participate in the decision-making process and lacks due independence and specialty as well. It is necessary to introduce the independent auditors so that they could fulfill the function of the financial and compliance audit properly. This paper shows one hypothesis based on the view that the independent directors and the supervisory board are in a position of the complementary relationship with each other. That is the double monitoring system unique to China, in which the independent directors perform the function of appropriateness audit and the supervisory board executes that of financial and compliance audit.

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