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China's Banking Reform: Problems and Potential Solutions

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  • Charles Goodhart
  • Xiaosong Zeng

Abstract

Despite recent reforms to China's financial system, there remain numerous shortcomings. The asset quality of state-owned banks continues to be unsatisfactory, with taxpayers and depositors subsidising both SOBs and SOEs. Banks' loan margins and capital adequacy remain too low. The capital market is also inefficient. The fundamental problem is the lack of an appropriate property rights infrastructure, without an adequate informational, incentive and legal framework.

Suggested Citation

  • Charles Goodhart & Xiaosong Zeng, 2006. "China's Banking Reform: Problems and Potential Solutions," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(3), pages 185-198.
    • Handle: RePEc:taf:jocebs:v:4:y:2006:i:3:p:185-198
    DOI: 10.1080/14765280600992204
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    References listed on IDEAS

    as
    1. Charles A. E. Goodhart, 1995. "The Central Bank and the Financial System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262071673, April.
    2. C. A. E. Goodhart, 1995. "The Central Bank and the Financial System," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37915-2, March.
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    Cited by:

    1. Tomas Hellebrandt & Jacob Funk Kirkegaard & Robert Z. Lawrence & Paolo Mauro & Silvia Merler & Sean Miner & Jeffrey J. Schott & Nicolas Veron, . "China's Economic Transformation: Lessons, Impact, and the Path Forward," PIIE Briefings, Peterson Institute for International Economics, number PIIEB15-3, January.
    2. Jia Liu & Dong Pang, 2009. "Financial factors and company investment decisions in transitional China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 91-108.

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