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Comparing Chinese and Indian Banks and their Socialist versus Capitalist Reforms

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  • Priscilla Liang

    (MVS School of Business and Economics, California State University Channel Islands, 1 University Drive, Camarillo, CA 93012, U.S.A.)

Abstract

Chinese and Indian banks have developed unique characteristics due to their distinctive reform paths and political regimes, yet they share attributes in common with banks of other emerging nations. After decades of reforms, banking systems in both countries remain relatively isolated and protected due to severe governmental interventions and strict policy directives. These limitations and drawbacks are in sharp contrast to China and India's present economic status, trade openness, and growth trajectories. This article describes the current status, strengths and weaknesses of Chinese and Indian banks; compares their commonalities and differences side-by-side; and traces banking developments and financial reforms to their particular socialist vs. capitalist political roots. Currently financial reforms are advancing in both countries with an aim to stimulate economic growth, yet their banks are burdened with rising bad debt and nonperforming loans. These article further addresses challenges of these banks and their policy implications

Suggested Citation

  • Priscilla Liang, 2016. "Comparing Chinese and Indian Banks and their Socialist versus Capitalist Reforms," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1310-1320.
  • Handle: RePEc:eco:journ1:2016-04-03
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    References listed on IDEAS

    as
    1. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, April.
    2. Mr. Lamin Y Leigh & Richard Podpiera, 2006. "The Rise of Foreign Investment in China’s Banks—Taking Stock," IMF Working Papers 2006/292, International Monetary Fund.
    3. Morgan, Peter J. & Lamberte , Mario, 2012. "Strengthening Financial Infrastructure," ADBI Working Papers 345, Asian Development Bank Institute.
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    Cited by:

    1. Li Xian Liu & Milind Sathye, 2019. "Bank Interest Rate Margin, Portfolio Composition and Institutional Constraints," JRFM, MDPI, vol. 12(3), pages 1-21, July.

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    More about this item

    Keywords

    Socialist Market Economy; Bank Reforms; Non-performing Loans;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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