This chapter focuses upon China’s process of financial reform. While major changes have taken place, it is generally recognized that China still has a long way to go. The financial system remains dominated by banks, particularly state-owned institutions that retain many of the features of a repressed financial system. Experiments in developing other financial sectors have not been overly successful. Attempts are being made to free the major banks from the cycle of directed lending to inefficient state enterprises, resulting in non-performing loans. The quality of the loan portfolios, supervision and regulation of the banking sector is a hindrance to progress. On the positive side, the growing influence of Hong Kong and the greater freedom permitted to foreign institutions is likely to provide a much-needed stimulus to the domestic market.
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- Financial Sector Reform
- Palgrave Macmillan UK