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The Banking Reform in China - Is the Chinese Bank Loan Market Liberal?

Karlsson, Per (2006)
Department of Economics
Abstract
China is growing to become the largest economy in the world, yet, the Middle Kingdom has a number of problems. New and productive non-state owned firms -the engine of growth- face a problem when searching for inexpensive external funding. That is, non state-owned firms have a hard time applying for commercial bank loans. The government is implementing liberating reforms. But the reforms are limited by a heavy state-ownership of the financial sector. This thesis considers a banking reform that should be as free and market oriented as possible, and tests if it can be statistically proven whether political relations are significant when a firm applies for a commercial bank loan. The result show that the reforms still has a relatively long way... (More)
China is growing to become the largest economy in the world, yet, the Middle Kingdom has a number of problems. New and productive non-state owned firms -the engine of growth- face a problem when searching for inexpensive external funding. That is, non state-owned firms have a hard time applying for commercial bank loans. The government is implementing liberating reforms. But the reforms are limited by a heavy state-ownership of the financial sector. This thesis considers a banking reform that should be as free and market oriented as possible, and tests if it can be statistically proven whether political relations are significant when a firm applies for a commercial bank loan. The result show that the reforms still has a relatively long way to go. Thus, the Chinese government must sharpen up its efforts to implement the reforms and modernize the Chinese commercial bank system. (Less)
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@misc{1335008,
  abstract     = {China is growing to become the largest economy in the world, yet, the Middle Kingdom has a number of problems. New and productive non-state owned firms -the engine of growth- face a problem when searching for inexpensive external funding. That is, non state-owned firms have a hard time applying for commercial bank loans. The government is implementing liberating reforms. But the reforms are limited by a heavy state-ownership of the financial sector. This thesis considers a banking reform that should be as free and market oriented as possible, and tests if it can be statistically proven whether political relations are significant when a firm applies for a commercial bank loan. The result show that the reforms still has a relatively long way to go. Thus, the Chinese government must sharpen up its efforts to implement the reforms and modernize the Chinese commercial bank system.},
  author       = {Karlsson, Per},
  keyword      = {China,Government intervention,bank loan,financial reform,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Banking Reform in China - Is the Chinese Bank Loan Market Liberal?},
  year         = {2006},
}