ABSTRACT
This chapter reviews the history of Chinese financial reforms and explores the source of, and the financial reasons for, China's economic development and discusses the overall trends and challenges of the evolution of China's financial system. It deals with the prospect of China's financial reform under the framework of East Asian financial cooperation. The China financial futures exchange (CFFEX) was founded with the approval of the State Council and the China Securities Regulatory Commission on 8 September 2006 in Shanghai and China's Stock Index Futures was not launched until 16 April 2010. Most banking resources in China are held or controlled by the policy banks and the big state-owned commercial banks (CB), and hence the small and medium-size enterprises (SME)s are finding it hard to borrow from China's banking system. China's formal stock markets have remained small, in contrast to the capital held in the banking system.
