Reforms of China's Banking System

Barth, James R.; Li, L.; Li, T.; Song, Frank M.

doi:10.1016/b978-0-12-397874-5.00005-1

Cited by 7 publications

(5 citation statements)

References 1 publication

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“…The banking sector in China is dominated by the "big five" state-owned banks that account for more than one half of the total banking assets in the country (Barth et al, 2013;Lei, 2014). In addition, there are three policy banks, which often implement the policy goals of the government.…”

Section: Chinese Banking Sectormentioning

confidence: 99%

Do bank loans still convey information to investors? Evidence from the split share structure reform in China

Tümer-Alkan

Zhang

et al. 2021

Emerging Markets Review

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Section: Chinese Banking Sectormentioning

confidence: 99%

Do bank loans still convey information to investors? Evidence from the split share structure reform in China

Tümer-Alkan

Zhang

et al. 2021

Emerging Markets Review

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“…Therefore, in order to broaden and diversify the revenue stream, so as to have greater market share, and to improve the competitiveness, the Chinese commercial banks have shifted to the development models which pertain to business and service diversification. Moreover, the number and the scale of the Chinese banks are also expanding (J. R. Barth et al, 2013), which will gradually transform the traditional monopoly market structure to be centered on the four major, state-owned banks, 4 into multi-level and all-round competitive market structures. This transformation will significantly help the commercial banks to increase their competitiveness, and occupy a larger market share.…”

Section: An Overview Of Banking Sector In Chinamentioning

confidence: 99%

Bank competition in China: a blessing or a curse for financial system?

Qin

Rizvi

et al. 2020

Economic Research-Ekonomska Istraživanja

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Owing to a lack of consensus on whether the competition among the banks brings stability, or vulnerability in the financial system, this research is aimed towards investigating the Chinese banking industry. For this purpose, we have used the Granger and subsample time varying rolling window, in order to estimate the dynamic causality of the competition in the banking sector, and the systematic risk factors that follow, in China. The purpose of exploring the two-way causality is to make the banking system more stable, and also to provide new and first-hand evidence that can aid in reducing the occurrence of systematic risks. The results show that the competition in the banking sector has a negative impact on the systematic risk. This means that the increased competition in the banking sector will eventually lead to a reduction in the systematic risk. The results of the study are supported by the competition-stability hypothesis. Also, following the results, the policy direction we propose is that the banks may aim at reducing their systematic risks. They may achieve this by increasing their market share and accelerating transformation, in order to improve their competitiveness, which will help the banking system in China to achieve a sustainable form of stability. Moreover, our findings will also be helpful for the Chinese Ministry of Commerce (MOFCOM), which has been, over the years, in the process of developing an assessment framework for bank mergers, while also trying to minimize the tradeoff between competition and financial stability.

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“…Second, four asset management companies (Cinda, Oriental, Great Wall and Huarong) were established to assist the Big Four banks in addressing their loan problems. As a result of these efforts, the NPL ratios of the Big Four banks declined sharply from 2002 to 2009 (Barth, Li, Li, & Song, ). Third, the government encouraged banks to be listed on stock exchanges to enhance external monitoring.…”

Section: Institutional Backgroundmentioning

confidence: 99%

Does political pressure matter in bank lending? Evidence from China

Cai

Xu²,

Zeng

2017

Financial Market

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Using provincial data from China between 2002 and 2011, we find substantial evidence indicating a positive association between the growth of bank loans issued by commercial banks and the political pressures faced by provincial leaders. This association is particularly true for state‐owned banks, which are much more politically pressurized than others, but is relatively attenuated in provinces with a more developed banking sector. We also find that bank loans issued under greater political pressures are less commercially oriented and have lower quality. Our findings are robust to a variety of sensitivity analyses and alternative measures of political pressure. Overall, our study contribute to a growing literature emphasizing the role of the political incentives of government officials in fuelling economic growth through credit allocation.

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Reforms of China's Banking System

Cited by 7 publications

References 1 publication

Do bank loans still convey information to investors? Evidence from the split share structure reform in China

Do bank loans still convey information to investors? Evidence from the split share structure reform in China

Bank competition in China: a blessing or a curse for financial system?

Does political pressure matter in bank lending? Evidence from China

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