Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book outlines the institutional structure of the Chinese financial system and presents available quantitative information and provides the basis for subsequent analysis of policies, reforms, and institutional changes. It reviews financial sector policies and performance from the founding of the People's Republic of China to the almost simultaneous death of Mao Zedong and downfall of the so-called "Gang of Pour," which set the stage for subsequent reforms. The book also provides some general background information on overall economic reform policies and implementation in China since 1976, with special emphasis on how the interact with financial reforms. In scholarly work on centrally planned economies the financial sector often has received less attention than it deserves. The government budget merely reflects planning geared toward the real economy and has no independent effect on firms' activities.