The Main objectives of financial reform in China are to get rid of irregularties and anomalies in the past reform period on the one hand to maintain competitiveness after joining the World Trade Organization in the near future on the other hand. Chine...
The Main objectives of financial reform in China are to get rid of irregularties and anomalies in the past reform period on the one hand to maintain competitiveness after joining the World Trade Organization in the near future on the other hand. Chinese financial markets are supposed to have such problems as bad loans and monopoly in the banking sector and regulated market interest rates.
The policy suggestions for financial reform in China can be summarized as follows:
First, financial reform programs should be implemented under the umbrella of the more general economic restructuring policy.
Second, particular emphasis should be placed on the resolution of both bad loans in state banks and bad debt in state enterprises.
Third, The creation of money markets should be sped up.
Fourth, The regulation and supervision in the financial sector should be reinforced.
Fifth, Capital markets should be opened up to foreigners on the basis of a gradualism approach.