Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book analyses China’s integration into the global economy. It examines how a state-dominated banking sector can threaten the macroeconomic stability, impede the development of the private sector, and lower the efficiency of loanable funds utilization. The book argues that credit and capital-driven growth over the past decades has enable China to maintain impressive growth during the reform era. It examines the initial success of the rural economy and then scrutinises the sluggish growth of the countryside since the mid-1990s by arguing that the rural problems stem from slow growth in rural industry, local government fiscal constraints and underdevelopment of rural finance. The book evaluates how a substantial state sector has constrained the growth of private enterprises which are the growth engine of the Chinese economy.