Banking reform in China (1978-1997) - a review and appraisal

Abstract

Considerable progress had been achieved in respect of the liberalization of the banking sector, ending China's isolation in the world The Chinese banking system has now changed significantly from the monobank system which the reformers had inherited in 1978. Unfortunately the central bank has not yet achieved its independent status. While the structure and role of the banking system has changed considerably, it still encounters some old and new problems. Of particular importance is the relationship between banks and state enterprises. The ultimate success of banking reform will be dependent on the progress in other key areas of reform such as the mode of public sector finance, state enterprise transformation and the creation of a more independent central bank.