ABSTRACT
The corporate history of China, including the financial institutions, is perceived as exhibiting efficiency and dramatic growth since the economic liberalization of China after 1978. This chapter considers the structure of the Chinese banking sector, and the reforms to the sector that have taken place since 1978. There were two principal phases of reform: the first initiated from domestic sources and the second through the facilitation of foreign investment. Foreign banks improved the quality of services, the technology and the monitoring of bank interests while improving the capital base of these ailing banks and restructuring existing weak loans. The chapter considers the issue of high ratio of non-performing loans in state-owned banks, as well as within a few private commercial banks. Academic opinion has remained sceptical of the impact of foreign equity in Chinese banks and Chinese securities markets.
