Banking Sector Reforms: Is China Following Japan's Footstep?

China has experienced double-digit GDP growth for over three decades, but recently the rate has slowed down considerably. This has led to speculation that China may be destined to follow Japan's fate, as insufficient reforms in the banking sector have resulted in an unprecedented financial catastrophe. However, the Element concludes that China is not on course to meet an immediate financial chaos, but the country needs further banking reforms to avoid a potential crisis.

Format: Paperback / softback
Length: 75 pages
Publication date: 23 June 2022
Publisher: Cambridge University Press

China has experienced double-digit GDP growth for over three decades, but recently, the rate has slowed down significantly. This period, known as the "new normal," has sparked curiosity among scholars and policymakers alike. Many are questioning whether China will follow Japan's path, which led to an unprecedented financial catastrophe due to insufficient reforms in the banking sector.

An asymmetric development between the Chinese banking sector and the real economy is observed, raising concerns about a potential crisis. This Element aims to address this question by examining China's banking sector reforms.

While China is not on the verge of an immediate financial meltdown, further banking reforms are necessary to avoid a potential crisis. The Element highlights the need for China to strengthen its financial regulatory framework, improve the efficiency of its banking system, and promote financial inclusion. It also emphasizes the importance of addressing the country's debt-to-GDP ratio and promoting sustainable economic growth.

In conclusion, while China's economic growth has slowed down, the country is not destined to meet Japan's legacy of financial chaos. However, proactive measures are needed to ensure financial stability and promote sustainable development.

ISBN-13: 9781009244800