China’s Financial Reform in Banking and Securities Markets
This chapter purposes to document the changes and discusses the challenges facing the financial system in China. It also discusses a number of recent measures and steps taken by the Chinese government in restructuring the financial infrastructure in order to improve the transparency and efficiency of the banking system and securities markets. The Chinese interbank market was initially for underground lending and borrowing by townships and village enterprises. The Agricultural Bank of China had the worst non-performing loan ratio at 30.07 percent at the end of 2002. The People's Bank of China formally allowed its establishment in 1985 as part of the economic reform. Securities funds debuted in October 1991 with the establishment of the Wuhan Securities Investment Fund and Shenzhen Nanshan Risk Investment Fund. China had only two stock exchanges in Shanghai and Shenzhen until March 2003 when China Technology and Equity Exchange was founded in Zhongguancun, Beijing.