1.2 Rationale for the Present Study

It is impossible to make a thorough investigation on all sorts of financial disclosure genres in this book.The present research focuses on one of the most common and well-established written financial genres-corporate annual report（CAR）,which is used by listed companies to disclose their financial information during the past fiscal year.A typical CAR consists of several sections.Some are mainly technical and numerical（such as financial statements）,which have been audited by public accountants;while other sections（such as chairman's letter, management's discussion and analysis, etc.）are more narrative and descriptive, likely to be manipulated to promote the positive results of a specific company so as to persuade readers of its soundness and future worth（Bhatia,2010;Malavasi,2006,2007）.For readers with limited skills in analyzing financial statements, they tend to refer to the narrative sections, which may influence investment decisions by strategic language use and thus are the focus of the present research.

As a matter of fact, a number of western studies have examined the narrative portions of CARs.Early research mainly centered upon the readability of the narratives within CARs, adopting formula-based approaches to determine whether messages were written at a level that is beyond the fluent comprehension of their intended audience（Pashalian Crissy,1950;Soper Dolphin,1964;Smith Smith,1971;Pound,1980;Parker,1982;Courtis,1986b）.Some other studies have investigated the readability of annual report texts to determine if companies with good and bad financial records differ in their reading ease（Courtis,1986a;Smith Taffler,1992;Subramanian et al.,1993）.These studies suggest that companies with poor records attempt to cover up their performance with obscure language, while the narratives in CARs of good performers are easier to read than those of poor performers.

From the 1980s, some studies began to adopt content analysis as the analytical tool to probe into the narratives of CARs（such as Ingram Frazier,1983;Bowman,1984;McConnell et al.,1986;Swales,1988;Kohut Segars,1992;etc.）.Ingram and Frazier（1983）identify eight themes by using word frequency investigation in the presiden's letter and management analysis sections of annual reports in three industries.They find a logical relationship between themes and financial characteristics.For example, more profitable companies refer relatively frequently to future growth and less frequently to restructuring plans.Bowman（1984）describes the possible uses of content analysis of annual reports for corporate strategy investigations.The research shows that CEOs have recognized the marketing significance of their messages.Kohut and Segars（1992）examine the content of the president's letters in the highest and lowest performing companies of the Fortune 500 and find that communication strategies differ in terms of subjects emphasized.The results of this research suggest that financial performance influences the manner in which CEOs report annual corporate results.

Later, studies on the narratives of CARs have become more diversified, and more linguistic and discursive studies emerged, especially from the 1990s.Skulstad（1996）explores the rhetorical organization of chairman's statements in annual reports issued by British companies within Swales'（1990）genre analysis framework.He proposes the Relationships and Confidence model that involves three moves:establishing the relationships between the chairman/company and the readers, maintaining confidence, and reinforcing the relationships already established.His research is among the earliest attempts that investigate the rhetorical features of the narratives in CARs.Hyland（1998a）also makes a valuable contribution to this line of research.He focuses on the role of metadiscourse in CEO's letters to shareholders and explores how CEOs attempt to influence the readers' perceptions and project a positive personal and corporate image.Other related discursive studies worth mentioning include Thomas（1997）,Rutherford（2005）and Amernic et al.（2007）.

Based on Halliday's Systemic Functional Linguistics,Thomas（1997）examines the verb structures, thematic structure, context and cohesion, and condensations of the management messages in the annual reports of a machine tool manufacturing company.The study finds that"as the news becomes more negative, linguistic structures suggest a factual,'objective'situation caused by circumstances not attributable to any persons who might otherwise be thought responsible"（ibid.:47）.Rutherford（2005）studies the Operating and Financial Review（OFR）part in the corporate annual reports of seven groups of companies in UK.Adopting a corpus-based approach, he identifies in the OFR sections greater numbers of references to profits than to losses among all groups（including loss-making companies）,greater numbers of references to assets than to liabilities across all groups and greater use of positively charged words and"up"words across all groups.Metaphor analysis of the narratives in CARs has also been carried out by some scholars.Amernic et al.（2007）analyze a corpus of 20 CEO letters signed by Jack Welch during his tenure as CEO of the General Electric Company, stressing how metaphors are used to portray Welch, to sustain key themes, and to win support for his transformational views.Five root metaphors are identified and discussed:Welchas"pedagogue","physician","architect","commander"and"saint".

Through the brief review of some previous studies, it can be seen that western scholars have long recognized the importance of investigating the language used in CARs and some of them have detected the underlying persuasive and promotional tendency of the narrative sections in their studies.However, compared with the vast and multi-perspective western studies on the narrative sections of CARs over the past decades, research in this field is relatively scarce in China.Though in the recent decade, some Chinese researchers have started to pay attention to this research field, most of them just focused on such issues as readability, impression management and self-serving attributions（Yan Sun,2002;Sun,2004ab,2005,2008;Sun Yao,2005;Ge,2007;Hou Wang,2008;etc.）.Through the key word"annual report"search on CNKI（www.cnki.net）, it was found that no domestic research had systematically examined the discursive features of the narrative parts of Chinese CARs and how Chinese executives typically seek to create a positive corporate image and influence their readers' views through language use.In addition, there is also a dearth of comparative study of Chinese and western corporate disclosure discourses, which may provide insights into the similarity and diversity of business cultures in the contemporary globalized world.What's more, although many western studies have looked into the linguistic and discursive features of European and American CARs, some of these studies were conducted a long time ago.Discourses within CARs might display some new features in a new environment, especially in the context of slow global economic recovery following the financial meltdown in 2008 and 2009.The present research is initiated by these factors and intends to fill the gap to some extent.It investigates"chairman's letter",which in this research is taken as a subgenre of corporate annual report with its own specific communicative purposes.It is the most typical and widely read narrative part of CARs（Courtis,1982）.Most of its readers are shareholders who seek a condensed review of the salient events of the past fiscal year and some indications about the company's future prospect.Though a chairman's letter is unlikely to influence investment decisions on its own,"it helps to confirm investor expectations and to prompt belief revisions about future outcomes"（Courtis Hassan,2002:394）.Bhatia（2010）highlights the persuasive and promotional functions of chairman's letter, classifying it as public relations discourse.According to him, chairman's letter primarily seeks to promote a positive corporate image.The current research endeavors to find out how chairman's letters achieve the persuasive purpose through language use.