The “extractive” financial system
Chapter 2 demonstrates that China’s financial system is overdeveloped and extractive. The general opinion is that China financial system is underdeveloped: we argue that it is also overdeveloped or oversized. We demonstrate that financial coopetition means a financial system can be underdeveloped and at the same time be overdeveloped. We utilize extensive data to show the extractiveness of China’s financial system: such as excessively high profits in the financial sector; overpaid financial workers, and the high financing cost for the real economy.