Banking Liberalization and Restructuring in Post-WTO China

Abstract

The accession of China to the World Trade Organization (WTO) in December 2001, marks a major step in the integration of its banking and financial markets into the global financial system. Although China weathered the Asian financial crisis in the late 1990s, its banking and financial institutions are facing international competition (resulting from implementation of WTO commitments) while, at the same time, struggling to deal with lingering problems of asset quality and commercial operation resulting from China's cultural, economic, legal and institutional background. Unfortunately, the two goals (liberalization and restructuring) and their requirements are not always in harmony, with the result that China may have difficulties in addressing existing banking problems, while at the same time complying with new international commitments. [PUBLICATION ABSTRACT]