Chinese banking system Essay Example | Topics and Well Written Essays - 500 words

Chinese banking system - Essay ExampleIn the banking vault of heaven, Chinese monetary system is by and large dominated by the large but underdeveloped banking system, which is mainly controlled by the four largest state-owned banks with a lot of non-performing loans. These state-owned banks will a lot of power by utilise the money injected into their business from the large foreign currency reserves to give out loans to selective borrowers, in particular, state-owned banks and to selective investment projects. But with the on going privatization in the banking sphere, this will permit the entry into the sector of more domestic and foreign banks that will be of great importance since it will stimulate the banking sector and bring in more competitiveness and root out every(prenominal) the NPL.Chinese Financial markets pose been characterized by speculation and insider information and have non been very successful in the effective allocation of resources as the banking sector. C hina has two main financial markets, the Shanghai Stock Exchange and Shenzhen Stock Exchange all established in 1990 and have been growing at a tremendous rate. But these markets have not been working at the rate which can bring in some improvements in the Chinese financial market sector. This is all due to encumbrances and poor regulation at the level of the regulatory environment oddly in the corporate and trading laws, legal protection of investors, and as well as institutions governing the enforcement of contracts that have all been poorly developed.