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The Development of the Financial System in the People's Republic of China

dc.contributor.authorDamian Tobin
dc.contributor.authorUlrich Volz
dc.description.abstractThis paper looks at the development and transformation of the People’s Republic of China (PRC)’s financial system since the start of economic and financial reforms in 1978. It describes how despite the rapid development of capital markets since the 1990s, the PRC’s financial system continues to be dominated by bank lending. Reforms have not eliminated the credit expansion impetus of large commercial banks, while the effectiveness of capital-based constraints and administrative measures is far below potential. Large state-owned banks have become important players in bond and equity markets, as well as important sources of liquidity provision for smaller commercial banks and a range of non-bank financial institutions through a combination of inter-bank funding activities, wealth management products and shadow banking/grey capital market activities. The importance of non-bank financial institutions has also continued to grow. Off-shore markets have increased the overseas holdings of financial assets, but their potential remains limited by capital controls and the fragility of the domestic financial system. An unintended consequence of this is that although the PRC’s state run financial system has become more complex and more interconnected domestically, foreign participation remains low.
dc.publisherAsian Development Bank Institute
dc.titleThe Development of the Financial System in the People's Republic of China
dc.typeWorking Papers
dc.subject.expertFinancial Stability
dc.subject.expertFinancial Management System
dc.subject.expertFinancial Restructuring
dc.subject.expertCapital Market Development
dc.subject.expertMarket Development
dc.subject.expertInternational Economics
dc.subject.expertMacroeconomic Analysis
dc.subject.expertPerformance Evaluation
dc.subject.expertImpact Evaluation
dc.subject.expertForeign and Domestic Financing
dc.subject.expertForeign Direct Investment
dc.subject.adbInternational Financial Market
dc.subject.adbMultilateral Financial Institutions
dc.subject.adbEconomic Recession
dc.subject.adbEconomic indicators
dc.subject.adbGrowth models
dc.subject.adbGross domestic product
dc.subject.adbEconomic forecast
dc.subject.naturalBusiness recessions
dc.subject.naturalMultilateral development banks
dc.subject.naturalRegulatory reform
dc.subject.naturalEconomic development projects
dc.subject.naturalEconomic policy
dc.subject.naturalEconomic forecasting
dc.subject.naturalInvestment Requirements
dc.subject.naturalInternational banks and banking
dc.subject.naturalCapital movements
dc.subject.naturalCentral banks and banking
dc.subject.naturalBills of exchange
dc.subject.naturalBanks and banking
dc.subject.naturalFinancial crisis
dc.title.seriesADBI Working Paper Series
dc.title.volumeNo. 825
dc.contributor.imprintAsian Development Bank Institute
oar.adminregionEast Asia Region
oar.countryPeople's Republic of China
oar.authorTobin, Damian
oar.authorVolz, Ulrich

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    The Asian Development Bank Institute (ADBI) Working Paper series is a continuation of the formerly named Discussion Paper series which began in January 2003. The numbering of the papers continued without interruption or change. ADBI was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in Asia and the Pacific.

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