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2024 | Buch

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The Financial Development of China

verfasst von: Rixu Lan

Verlag: Springer Nature Singapore

Buchreihe : Understanding China

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Inhaltsverzeichnis

Über dieses Buch

The book builds an overview of Chinese financial development in the past 70 years since the founding of the PRC. China's finance has experienced a complex evolution process, which could be roughly divided into two major stages. In the 30 years before the reform and opening-up, China built a new financial system through integrating finance in the old and new liberated areas, based on the development of the financial industry during the revolutionary war, and then quickly established a financial system with the simple purpose of “managing funds” to meet the needs of the centralized socialist economic system. In more than 40 years after the reform and opening up, the role of China's financial system has gradually shifted from “managing funds” to “guiding the market”. A multi-level financial system was formed and centered on the People's Bank of China, with complete functions, diverse forms, collaborative division, and mutual complement. The transformation of China’s finance functions has greatly promoted the rapid growth of China's economy for 35 years. In the current economic restructuring, the "Internet +" model, led by Internet finance, has undoubtedly triggered the "squid effect" on China's economic development and financial sector innovation. Many areas, such as third-party payment and online lending, have begun to lead globally. Furthermore, the establishment of an inclusive financial system has brought financial functions closer to their essential role of serving the real economy.

Inhaltsverzeichnis

Frontmatter

The Development of Finance in the Early Period of the People’s Republic of China

Frontmatter

Chapter 2. The Establishment of China’s Financial System

Abstract

At the beginning of the People's Republic of China, China's financial industry was quite chaotic, and the primary task facing the central government was to establish a unified RMB system, and effectively integrate financial organizations in the old and new liberated areas on the basis of the People's Bank of China to establish a new Chinese financial system, unify the currency, stabilize prices and promote the rapid recovery of the national economy.

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Chapter 3. China's Financial Contribution to National Economic Recovery

Abstract

With the process of building an independent financial system and unifying the RMB system in the early days of the People's Republic of China, financial organizations with the People's Bank of China as the main body gave full play to their functions, laying a good foundation for the recovery of the national economy. It has taken less than three years for our country to reach the highest level of national economic development before 1949. At the same time, the combination of political and economic measures has quickly calmed the persistent high prices and inflation. Under these conditions, China's financial industry has achieved rapid development.

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The Tortuous Development of the Financial Industry in the Period of Planned Economy

Frontmatter

Chapter 4. The Formation and Development of “Unified” Financial System

Abstract

With the establishment of the highly centralized planned economic management system, China also established a financial management system that was adapted to this system. The People’s Bank of China was practically the only financial institution at that time, with commercial credit concentrated in the national bank. The People’s Bank of China undertook both commercial banking operations such as deposit-taking and loan granting, as well as performing the central banking functions of regulating currency circulation and credit allocation. During this process, the functions of finance became increasingly simplified, focusing on core tasks such as cash management, settlement, and treasury management.

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Chapter 5. The Tortuous Development of the Financial Industry During the Planned Economy Period

Abstract

With the formation of China’s highly centralized and unified financial management system, the functions of finance gradually shrank to the scope of “managing funds”. However, it played a significant role in the early completion of the three major socialist transformations in China and the smooth implementation of “the First Five-Year Plan”. Subsequently, influenced by changes in social, political, and economic environments, China’s financial industry experienced a series of twists and turns, frequent adjustments, but overall presented a declining trend in financial functions and business.

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Development of the Financial Industry in the Transition to a Market Economy Period

Frontmatter

Chapter 6. Establishment and Improvement of the Central Banking System

Abstract

After the dismantling of the “Gang of Four,” accompanied by the rectification of the economic sector, the financial domain also began to adjust and streamline. The Third Plenary Session of the 11th Central Committee of the Communist Party of China made the decision to shift the focus of work to the economic sector, initiating financial system reforms around the idea of “truly turning banks into banks.” The People’s Bank of China (PBOC) gradually transformed from its dual functions before the era of reform and opening up, strengthening its role as the central bank.

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Chapter 7. Reform and Development of the Banking Industry

Abstract

Since the beginning of the reform and opening-up policy, China’s banking industry has largely followed the process of reforming the socialist economic system, adapting to the transition from a planned economy to a market economy, and gradually achieving the goals of banking reform. Following the approach of separating allocation and management of funds, the first step was to separate the Agricultural Bank of China(ABC), Bank of China(BOC), Industrial and Commercial Bank of China from the People’s Bank of China(ICBC), and the China Construction Bank(CCB) from the Ministry of Finance. These four state-owned specialized banks underwent commercialization reforms and gradually transformed into four state-owned commercial banks.

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Chapter 8. The Establishment and Development of Non-bank Financial Institutions

Abstract

Non-bank financial institutions are an important component of China’s financial industry. Since the reform and opening up, they have gradually resumed or emerged in the process of financial reform and deepening, in line with the development of the social economy. Now, they have formed a diversified system of non-bank financial institutions, including insurance, securities, trusts, funds, financial leasing, corporate group finance companies, and asset management companies.

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Chapter 9. The Establishment and Development of Financial Market

Abstract

Since the reform and opening up, with the rapid development of social economy, the financial market which was completely suppressed has gradually developed, and a complete financial market system consisting of money market and capital market has been formed so far. During the formation of the financial market, it initially sprouted with the development of social enterprises, and then developed rapidly and disorderly under the strong impetus of local governments to develop the economy. After the “August 10 Incident” in Shenzhen, the financial market gradually transited to the central government’s leadership, and gradually shifted to the government-led and market-driven transformation, so far, the degree of marketization has been deepening. Although the development of the financial market has experienced twists and turns, and direct financing has lagged behind indirect financing for a long time, it has become an important force to promote the development of China’s real economy, in line with the path of gradual economic development.

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Chapter 10. The Revolution of Foreign Exchange Management System and the Development of Foreign Exchange Market

Abstract

Since the beginning of the reform and opening up, with the rapid development of China’s socio-economy, the existing foreign exchange management system has become inadequate to meet the demands of the new socio-economic situation. In response to the trend of economic development, the Chinese government separated the foreign exchange management agency from the People’s Bank of China (PBOC) and established the State Administration of Foreign Exchange (SAFE). Foreign exchange management gradually shifted from government intervention to market regulation. During this period, the Chinese foreign exchange market began to take shape, fostering a positive interaction among various market participants in the financial sector, thereby contributing to the healthy and sustainable development of China’s economy in areas such as foreign trade and investment.

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Chapter 11. The Rise and Standardized Development of Internet Finance

Abstract

In 2013, the rapid development of internet finance in China gave rise to the “Catfish Effect” in the country’s financial sector, triggering a wave of innovation in the industry. It expanded the scope of financial services, extended the financial industry chain, and rapidly enhanced the competitiveness of China’s financial industry. However, the emergence of internet finance on the basis of the “three nos” (no entry threshold, no industry standards, no relevant regulatory controls) also brought significant risks. Incidents such as defaults, disappearances, and fraud became rampant, affecting and disrupting the normal development order of China’s financial industry and harming the rights of numerous investors. In response, regulatory bodies such as the People’s Bank of China (PBOC) continuously explored measures to regulate the development of internet finance. They introduced various measures to lay the foundation for the increasingly standardized and healthy development of internet finance.

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Chapter 1. Introduction

Abstract

2019 marks the 70th anniversary of the founding of the People’s Republic of China. The financial development of China has gone through a journey of 70 years, experiencing two distinct periods. In the 30 years before the reform and opening up, China integrated the financial systems of the old and newly liberated areas on the basis of the revolutionary war period’s financial industry, establishing the financial system of China. Subsequently, to adapt to the needs of the social economic system, China quickly established a relatively single financial system with a focus on “managing funds”. In the 40 years since the reform and opening up, China’s financial sector has gradually shifted from “managing funds” to “regulating market”, forming a multi-level financial system centered around the People’s Bank of China. This system is characterized by comprehensive functions, diverse forms, division of labor, cooperation, and complementarity. It has achieved remarkable results in utilizing macro-financial regulation to promote more than 30 years of high-speed economic growth in China, often referred to as a “miracle”. In terms of current economic structural adjustments and transformations, the “Internet+” model led by internet finance has undoubtedly triggered the “Catfish Effect” in China’s economic development. The financial sector has witnessed a surge of innovation, and certain branches are beginning to surpass international standards.

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Backmatter

Titel: The Financial Development of China
verfasst von: Rixu Lan
Verlag: Springer Nature Singapore
Electronic ISBN: 978-981-9782-73-4
Print ISBN: 978-981-9782-72-7
DOI: https://doi.org/10.1007/978-981-97-8273-4