chapter  7
20 Pages

Withdrawal of the financial restraint system

Reform of the financial system
ByChangwen Zhao, Hongming Zhu

Chapter 7 recommends financial reforms to remedy an extractive financial system. China may consider reforms like interest rate liberalization; improving and perfecting financial competition;removing financial restraint policies; improving financial competition; relaxing financial market access; developing multi-layer capital market and non-banking financial institutions; reforming commercial banks; reforming policy-oriented financial institutions, and financial regulation optimization. Ongoing reform is recommended.