TY  - JOUR
AU  - Allen, Franklin
AU  - Qian, Jun "QJ"
AU  - Zhang, Chenying
AU  - Zhao, Mengxin
TI  - China's Financial System: Opportunities and Challenges
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17828
PY  - 2012
Y2  - February 2012
DO  - 10.3386/w17828
UR  - http://www.nber.org/papers/w17828
L1  - http://www.nber.org/papers/w17828.pdf
N1  - Author contact info:
Franklin Allen
Brevan Howard Centre for Financial Analysis
Imperial College Business School
Tanaka Building
South Kensington
London, SW7 2AZ
Tel: +44 (0) 207 594 9195
E-Mail: f.allen@imperial.ac.uk

Qian Jun
Fudan University 
E-Mail: qianj@fudan.edu.cn

Chenying Zhang
University of Pennsylvania
E-Mail: chezhang@wharton.upenn.edu

Mengxin Zhao
University of Alberta
Tel: 7802481318
E-Mail: mengxin.zhao@ualberta.ca
M1  - published as Franklin Allen, Jun "QJ" Qian, Chenying Zhang, Mengxin Zhao. "China's Financial System: Opportunities and Challenges," in Joseph P. H. Fan and Randall Morck, editors, "Capitalizing China" University of Chicago Press (2013)

M3  - presented at "Capitalizing China Conference", December 15-16, 2009
AB  - We provide a comprehensive review of China's financial system, and explore directions of future development. First, the financial system has been dominated by a large banking sector. In recent years banks have made considerable progress in reducing the amount of non-performing loans and improving their efficiency. Second, the role of the stock market in allocating resources in the economy has been limited and ineffective. We discuss issues related to the further development of China's stock market and other financial markets. Third, the most successful part of the financial system, in terms of supporting the growth of the overall economy, is a non-standard sector that consists of alternative financing channels, governance mechanisms, and institutions. The co-existence of this sector with banks and markets can continue to support the growth of the Hybrid Sector (non-state, non-listed firms). Finally, among the policies that will help to sustain stable economic growth in China are those that reduce the likelihood of damaging financial crises, including a banking sector crisis, a real estate or stock market crash, and a "twin crisis" in the currency market and banking sector.
ER  -