While China has enjoyed unprecedented economic growth, its banking industry is frequently derided as being unwieldy, slow and ineffective. This article gives a detailed study of the banking sector of China and the specific role that it plays in the Chinese economy today. The article argues that while the capitalist system criticizes the Chinese banking system as archaic, it is actually much more effective in its functioning than many of the so called developed financial systems of its western counterparts.

The article also deals with the issue of banking reforms under consideration in China and what it entails for the Chinese economy. The author identifies the main problems of the banking system and the objectives of the Chinese government behind such reforms.

October 11, 2008.

This article is reprinted from gtnews.com by permission from the author.