| Description |
-
Volume 10, Issue 2.
Summer
In response to policy changes by the Chinese government, since 1979 over five dozen foreign banks have set up representative offices in Beijing alone. Since the declaration of four Special Economic Zones in 1985, foreign banks have also opened branches in China. In this article, Lawrence Paul Shapiro analyzes these recent reforms of the Chinese ... read morebanking system and argues that, despite what appears to be official Chinese encouragement of foreign banks, it is unlikely that large numbers of foreign banks will be able to participate profitably in the Chinese domestic market. Current reforms, according to Mr. Shapiro, have left unaffected the system of state controls on business and banking which both makes credit analysis for foreign banks difficult and makes competition with Chinese banks, with their controlled source of deposits and allocations, virtually impossible. Further and more significant reforms, such as allowing foreign banks to deal in local currency, are necessary before foreign banks will be fully incorporated into the Chinese system. The author concludes that though current prospects for foreign banks in China may appear bleak, there is hope that such reforms will be passed, and that those banks which choose to remain now may eventually profit in the future.
read less
|
|---|
This object is in collection
