Money, Banking, and Financial Markets in China

Money, Banking, and Financial Markets in China

Money, Banking, and Financial Markets in China

Money, Banking, and Financial Markets in China

Synopsis

"This book offers the first comprehensive study of the money, banking, and financial markets in China since the establishment of the central bank system in 1984. The author analyzes the impact of the profound institutional changes of the 1980s and the early 1990s and highlights the fundamental transformation of the role of money - from a passive accounting tool in the centrally planned system to an active and intrinsically important factor in determining the growth and stability of the present economy. The theoretical and empirical analyses of the book are based on the newly established financial system and the most recent data available. The transitive nature of the financial sector during economic reform is especially emphasized. The author's central arguments are supported by in-depth analyses of every important aspect of the financial sector, including the function of the central bank and its relationship with specialized banks and other financial institutions, money supply and demand, monetization, price reforms and inflation, nonbank financial institutions, and new developments in the financial security markets. Extensive use is made of case studies and illustrative examples. A complete set of data from all empirical studies is provided to allow readers to examine the models and confirm the econometric results." Title Summary field provided by Blackwell North America, Inc. All Rights Reserved

Excerpt

China is now at a critical moment of economic transition from a centrally planned economy to a market economy. the Chinese experience is truly unique in the sense that it has used a gradualist approach to transition. the reforms in China are successful by almost any economic standard. the average Gross National Product (GNP) growth rate of China was 9.0 percent for the 14-year period from 1979 to 1992. Per capita national income increased on average by 5.5 percent annually for the same period, making this the most rapid growth period in Chinese history. Given that it has 22 percent of the world's population, China's achievement is very significant. Figures 1.1 and 1.2 illustrate the level of gnp and its growth rate in China during the reform period. Recently the International Monetary Fund and the World Bank have more astonishing estimations of Chinese gdp figures according to purchasing-power parities (see Appendix to Chapter 1).

After about 15 years of economic reform, the Chinese economy has changed significantly. First, the state-owned proportion of the economy has been shrinking continually. the economy has been changed from a predominantly state-owned, centrally-planned economy to a mixed ownership economy. in 1992, the output produced by non-state sector was already 54 percent of gnp.

Second, China is now an open economy. in 1992, total exports were 85 billion us dollars and total imports were 80.6 billion us dollars, an increase of 18.2 percent and 26.4 percent respectively over the previous year. the total value of China's foreign trade accounted for about one‐ third of its gnp (calculated by the official exchange rate), much higher than the equivalent figure for the United States (16.4 percent), and the trade superpower Japan (17.1 percent). in 1992, the total value of newly signed foreign investment contracts was 68.5 billion us dollars, an increase of 2.4 times over the year before. the amount of actually used foreign . . .

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