IDEAS home Printed from https://ideas.repec.org/a/taf/glecrv/v40y2011i2p161-178.html
   My bibliography  Save this article

China's Banking Reform: The Remaining Agenda

Author

Listed:
  • Charles Kwong

Abstract

Since 1994, China has endeavoured to establish a banking system that works more closely to commercial principles by transforming the specialized banks (SBs) into state-owned commercial banks (SOCBs). However, lending decisions of the SOCBs were still determined by state directives instead of profitability consideration. This paper argues that although the post-WTO banking reforms have accomplished staggering results, China's SOCBs need an overhaul of ownership structure if China aims to develop a full-fledged market-based banking system. It also argues that the current banking reforms are not comprehensive enough to sustain China's long-term economic development because there still remain noticeable capital constraints facing small- and medium-sized private enterprises, particularly those in rural areas.

Suggested Citation

  • Charles Kwong, 2011. "China's Banking Reform: The Remaining Agenda," Global Economic Review, Taylor & Francis Journals, vol. 40(2), pages 161-178.
    • Handle: RePEc:taf:glecrv:v:40:y:2011:i:2:p:161-178
    DOI: 10.1080/1226508X.2011.585056
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/1226508X.2011.585056
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1226508X.2011.585056?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Podpiera, 2006. "Progress in China’s Banking Sector Reform: Has Bank Behavior Changed?," IMF Working Papers 2006/071, International Monetary Fund.
    2. Brehm Stefan, 2008. "Risk Management in China's State Banks - International Best Practice and the Political Economy of Regulation," Business and Politics, De Gruyter, vol. 10(1), pages 1-31, May.
    3. Charles C. L. Kwong, 2009. "From Commercialization to WTO Accession," Chinese Economy, Taylor & Francis Journals, vol. 42(5), pages 8-20, September.
    4. Brehm, Stefan, 2008. "Risk Management in China's State Banks - International Best Practice and the Political Economy of Regulation," Business and Politics, Cambridge University Press, vol. 10(1), pages 1-29, April.
    5. Charles Kwong & Pak Lee, 2005. "Bad Loans Versus Sluggish Rural Industrial Growth: A Policy Dilemma of China's Banking Reform," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 10(1), pages 1-25.
    6. Yong Guo, 2002. "Banking Reforms and Monetary Policy in the People’s Republic of China," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-4039-1454-5, October.
    7. Chien-Hsun Chen & Hui-Tzu Shih, 2004. "Banking and Insurance in the New China," Books, Edward Elgar Publishing, number 3177.
    8. Kudrna, Zdenek, 2007. "Banking reform in China: Driven by international standards and Chinese specifics," MPRA Paper 7320, University Library of Munich, Germany.
    9. Shelagh Heffernan & Xiaoqing Fu, 2010. "Determinants of financial performance in Chinese banking," Applied Financial Economics, Taylor & Francis Journals, vol. 20(20), pages 1585-1600.
    10. Wai Chung Lo, 2001. "A Retrospect on China's Banking Reform," Chinese Economy, Taylor & Francis Journals, vol. 34(1), pages 15-28, January.
    11. Mr. Marc G Quintyn & Mr. Bernard J Laurens & Mr. Hassanali Mehran & Mr. Tom Nordman, 1996. "Monetary and Exchange System Reforms in China: An Experiment in Gradualism," IMF Occasional Papers 1996/006, International Monetary Fund.
    12. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, April.
    13. Shujie Yao & Chunxia Jiang & Genfu Feng & Dirk Willenbockel, 2007. "WTO challenges and efficiency of Chinese banks," Applied Economics, Taylor & Francis Journals, vol. 39(5), pages 629-643.
    14. Lin, Xiaochi & Zhang, Yi, 2009. "Bank ownership reform and bank performance in China," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 20-29, January.
    15. Fred Gale, 2009. "Financial Reforms Push Capital to the Countryside," Chinese Economy, Taylor & Francis Journals, vol. 42(5), pages 58-78, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Xudong & Yao, Liming & Xu, Zhenye & Xu, Qi, 2018. "Foreign entry and bank competition on financial products in China: A model of bank size," Pacific-Basin Finance Journal, Elsevier, vol. 49(C), pages 43-59.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bing Xu & Adrian Van Rixtel & Michiel Van Leuvensteijn, 2013. "Measuring bank competition in China: a comparison of new versus conventional approaches applied to loan markets," BIS Working Papers 422, Bank for International Settlements.
    2. Liangliang He & Lei Chen & Frank Hong Liu, 2017. "Banking reforms, performance and risk in China," Applied Economics, Taylor & Francis Journals, vol. 49(40), pages 3995-4012, August.
    3. Worthington, Andrew C. & Zelenyuk, Valentin, 2018. "Data envelopment analysis, truncated regression and double-bootstrap for panel data with application to Chinese bankingAuthor-Name: Du, Kai," European Journal of Operational Research, Elsevier, vol. 265(2), pages 748-764.
    4. Huang, Tai-Hsin & Lin, Chung-I & Chen, Kuan-Chen, 2017. "Evaluating efficiencies of Chinese commercial banks in the context of stochastic multistage technologies," Pacific-Basin Finance Journal, Elsevier, vol. 41(C), pages 93-110.
    5. Ziliang Deng & Honglin Guo & Guilan Kong, 2011. "Efficiency Spillovers of Foreign Direct Investment in the Chinese Banking System," Global Economic Review, Taylor & Francis Journals, vol. 40(2), pages 179-191.
    6. Barros, Carlos P. & Chen, Zhongfei & Liang, Qi Bin & Peypoch, Nicolas, 2011. "Technical efficiency in the Chinese banking sector," Economic Modelling, Elsevier, vol. 28(5), pages 2083-2089, September.
    7. Andrei Vernikov, 2014. "China and Russia: Institutional Coherence between the Banking Systems," UCL SSEES Economics and Business working paper series 130, UCL School of Slavonic and East European Studies (SSEES).
    8. Chen, Zhao & Poncet, Sandra & Xiong, Ruixiang, 2020. "Local financial development and constraints on domestic private-firm exports: Evidence from city commercial banks in China," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 56-75.
    9. Rasoul Rezvanian & Rima Turk Ariss & Seyed Mehdian, 2011. "Cost efficiency, technological progress and productivity growth of Chinese banking pre- and post-WTO accession," Applied Financial Economics, Taylor & Francis Journals, vol. 21(7), pages 437-454.
    10. Robin, Iftekhar & Salim, Ruhul & Bloch, Harry, 2018. "Financial performance of commercial banks in the post-reform era: Further evidence from Bangladesh," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 43-54.
    11. Dong He & Honglin Wang, 2013. "Monetary Policy and Bank Lending in China - Evidence from Loan-Level Data," Working Papers 162013, Hong Kong Institute for Monetary Research.
    12. Sunil Mohanty & Hong-Jen Lin, 2021. "Efficiency in China’s Banking Sector: A Comparative Analysis of Pre- and Post-Basel II Eras," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-29, June.
    13. Zafer ADALI, 2017. "The Properties Of The Shadow Banking In China," Fiscaoeconomia, Tubitak Ulakbim JournalPark (Dergipark), issue 1.
    14. Hasanul Banna & Syed Karim Bux Shah & Abu Hanifa Md Noman & Rubi Ahmad & Muhammad Mehedi Masud, 2019. "Determinants of Sino-ASEAN Banking Efficiency: How Do Countries Differ?," Economies, MDPI, vol. 7(1), pages 1-23, February.
    15. Xiao Yan Zhou & Ben Caldecott & Andreas G. F. Hoepner & Yao Wang, 2022. "Bank green lending and credit risk: an empirical analysis of China's Green Credit Policy," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1623-1640, May.
    16. Fredrik N. G. Andersson & Katarzyna Burzynska & Sonja Opper, 2016. "Lending for growth? A Granger causality analysis of China’s finance–growth nexus," Empirical Economics, Springer, vol. 51(3), pages 897-920, November.
    17. Firth, Michael & Lin, Chen & Liu, Ping & Wong, Sonia M.L., 2009. "Inside the black box: Bank credit allocation in China's private sector," Journal of Banking & Finance, Elsevier, vol. 33(6), pages 1144-1155, June.
    18. Jiang, Chunxia & Yao, Shujie & Zhang, Zongyi, 2009. "The effects of governance changes on bank efficiency in China: A stochastic distance function approach," China Economic Review, Elsevier, vol. 20(4), pages 717-731, December.
    19. Qiubin Huang & Jakob De Haan & Bert Scholtens, 2019. "Analysing Systemic Risk in the Chinese Banking System," Pacific Economic Review, Wiley Blackwell, vol. 24(2), pages 348-372, May.
    20. Pessarossi, Pierre & Godlewski, Christophe J. & Weill, Laurent, 2012. "Foreign bank lending and information asymmetries in China: Empirical evidence from the syndicated loan market," Journal of Asian Economics, Elsevier, vol. 23(4), pages 423-433.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:glecrv:v:40:y:2011:i:2:p:161-178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RGER20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.