Impact of Financial System on Developing Countries
Section one
Introduction
General background of the study
Examination of the role of financial system in supporting the growth of its economy and explore the directions of its future development. Almost every functioning financial system includes financial markets and intermediaries (e.g., a banking sector), but how these two sectors contribute to the entire financial system and economy differs significantly across different countries. Although there is no consensus regarding the prospects of China’s future economic growth, a prevailing view on China’s financial system speculates that it is one of the weakest links in the economy and it will hamper future economic growth.
A comprehensive examination of all aspects of China’s financial system, and extensive comparisons with other countries where data is available are provided below. We also discuss briefly what has worked and what remains to be done within the financial system, and examine how further development can better serve the entire economy.
Drawing four main conclusions about China’s financial system and its future development.
First, examination and compare China’s banking system and financial markets with those of both developed and emerging countries, and the findings that China’s financial system is dominated by a large but under-developed banking system, which is mainly controlled by the four largest state-owned banks with a large amount of non-performing loans (NPLs). The continuing effort of improving the banking system, in particular, reducing the amount of NPLs of the major banks to normal levels, is the most important aspect of reforming China’s financial system in the short run. We also highlighted the trend of macroeconomic indicator in China.
And in conclusion, the review of growth in china and its financial system . However, their scale and importance are not comparable to the banking sector for the entire economy. Moreover, the financial markets have not been effective in allocating
Introduction
General background of the study
Examination of the role of financial system in supporting the growth of its economy and explore the directions of its future development. Almost every functioning financial system includes financial markets and intermediaries (e.g., a banking sector), but how these two sectors contribute to the entire financial system and economy differs significantly across different countries. Although there is no consensus regarding the prospects of China’s future economic growth, a prevailing view on China’s financial system speculates that it is one of the weakest links in the economy and it will hamper future economic growth.
A comprehensive examination of all aspects of China’s financial system, and extensive comparisons with other countries where data is available are provided below. We also discuss briefly what has worked and what remains to be done within the financial system, and examine how further development can better serve the entire economy.
Drawing four main conclusions about China’s financial system and its future development.
First, examination and compare China’s banking system and financial markets with those of both developed and emerging countries, and the findings that China’s financial system is dominated by a large but under-developed banking system, which is mainly controlled by the four largest state-owned banks with a large amount of non-performing loans (NPLs). The continuing effort of improving the banking system, in particular, reducing the amount of NPLs of the major banks to normal levels, is the most important aspect of reforming China’s financial system in the short run. We also highlighted the trend of macroeconomic indicator in China.
And in conclusion, the review of growth in china and its financial system . However, their scale and importance are not comparable to the banking sector for the entire economy. Moreover, the financial markets have not been effective in allocating