ABSTRACT
China's financial system has been governed by the central government and granted monopolistic power until the 1980s. However, following the ‘open door’ policy implemented in 1979, the typical central planning banking system has not been consistent with the rapid development of the economy. The Chinese government has thus proposed a series of banking reforms to improve the banking system and support the macro-economy. Although aggressive progress has been observed, the Chinese banking system has still experienced low efficiency and large amounts of non-performing loans, particularly after accession to the World Trade Organization (WTO). In this chapter, we aim to estimate whether Chinese bank performance has improved in the presence of financial reforms in a post-WTO period.
