Asset Relativity: A Theoretical Approach

Asset Relativity: A Theoretical Approach

XiaoFeng HE   RenYou TAN

(School of Economics, Peking University, Beijing, 100000)

Abstract:This paper proposes a systematic theoretical framework for asset operation, "Theory ofAsset Relativity", to explain Chinese asset operation practices. First, based on a comprehensivesynthesis of various theories, assets are defined as economic resources that can bring predictablefuture economic value and strategic value to their owners, emphasizing that assets possesscharacteristics of value, uncertainty, clear property rights, non-consumability, and various forms.Assets can be classified into four categories: tangible assets, cash assets, credit assets, andsecurities assets. Second, the paper reviews existing asset operation theories. Domestic research is mainly divided into three categories: discussing the motivation and risks of asset operation,analyzing asset operation models and cases, and attempting to establish a Chinese theoreticalframework. However, most studies lack a rigorous axiomatic system and can only be consideredconceptual frameworks. Finally, this paper establishes a theoretical model of asset operation. The"General Model of Asset Operation" analyzes the transformation among four forms of assets,including 16 basic conversion processes. The paper elaborates on two important methods: assetsecuritization and mergers and acquisitions, and clarifies their specific types. The "Super-GeneralEquilibrium of Asset Operation" analyzes the equilibrium state following transformation,focusing on the quantitative proportional relationships among the four types of assets andchanges in their stock levels. This reflects the smoothness of capital market operation and incomedistribution outcomes, and can be used to assess the health status of an economic system.

Keywords:Asset Relativity; Asset Operation; Theory Framework

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