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China's Banking Reform and Profitability

Author

Listed:
  • Erh-Cheng Hwa

    (China Construction Bank, 1-1, Naoshikou Street, Xicheng District, Beijing, China, 100032, China)

  • Yang Lei

    (China Center for Economic Research, Peking University, 165, Long Run Park, Peking University, Beijing, China, 100871, China)

Abstract

Just as the worse global financial crisis since the Second World War threatens the survival of many global financial giants, the strong financial performance of the Chinese banks stands out. The record profits of Chinese banks are commendable considering that they were considered insolvent not too long ago. The paper reviews the reform strategy of Chinese state commercial banks and its implementation, as well as their strong financial performance in 2007 based upon the four largest listed state commercial banks. Even though a strong economy may have boosted performance, banking reform should have played a significant role in turning around Chinese banks.

Suggested Citation

  • Erh-Cheng Hwa & Yang Lei, 2010. "China's Banking Reform and Profitability," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 215-236.
    • Handle: RePEc:wsi:rpbfmp:v:13:y:2010:i:02:n:s0219091510001925
    DOI: 10.1142/S0219091510001925
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    References listed on IDEAS

    as
    1. Prasad, Eswar S., 2009. "Is the Chinese growth miracle built to last?," China Economic Review, Elsevier, vol. 20(1), pages 103-123, March.
    2. Panicaos Demetriades & Jun Du & Sourafel Girma & Chenggang Xu, 2008. "Does the Chinese Banking System Promote the Growth of Firms?," WEF Working Papers 0036, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
    3. Kuijs, Louis, 2005. "Investment and saving in China," Policy Research Working Paper Series 3633, The World Bank.
    4. Bayraktar, Nihal & Wang, Yan, 2006. "Banking sector openness and economic growth," Policy Research Working Paper Series 4019, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    China; banking reform; bank balance sheets; foreign strategic partners; public listing;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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