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Contradictions in China's Financial Reforms: The Relationship between Banks and Enterprises

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  • Bowles, Paul
  • White, Gordon

Abstract

This paper investigates the effects of the reforms in China's financial sector on enterprise performance. Particular attention is paid to the effect of the increased role played by banks as a result of the major reorganization of the banking system which occurred in 1984. It is argued that, although China's banks now possess considerable power to discriminate between enterprises in the allocation of credit, in practice this power is seldom used and enterprises have not been subjected to significantly increased financial discipline as a result of the reforms. The reasons for this are discussed and the prospects for further reform assessed. Copyright 1989 by Oxford University Press.

Suggested Citation

  • Bowles, Paul & White, Gordon, 1989. "Contradictions in China's Financial Reforms: The Relationship between Banks and Enterprises," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(4), pages 481-495, December.
  • Handle: RePEc:oup:cambje:v:13:y:1989:i:4:p:481-95
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    Cited by:

    1. repec:ilo:ilowps:287851 is not listed on IDEAS
    2. Charles Kwong & Pak Lee, 2005. "Bad Loans Versus Sluggish Rural Industrial Growth: A Policy Dilemma of China's Banking Reform," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 10(1), pages 1-25.
    3. Truong Dhd. & Gates, C. L., 1992. "Effects of government policies on the incentive to invest, enterprise behaviour and employment: the case study of Vietnam," ILO Working Papers 992878513402676, International Labour Organization.
    4. Raiser, Martin, 1994. "Lessons for whom, from whom? The transition from socialism in China and Central Eastern Europe compared," Kiel Working Papers 630, Kiel Institute for the World Economy (IfW Kiel).
    5. George K.Y. Tseo, 1996. "Chinese Economic Restructuring: Enterprise Development through Employee Ownership," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 17(2), pages 243-279, May.
    6. Li, Xiaoming, 2000. "Reforming China's financial system and monetary policies: a sovereign remedy for locally initiated investment expansion?," Journal of Development Economics, Elsevier, vol. 62(2), pages 423-443, August.

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