Financial governance and economic development: making sense of the Chinese experience

Dic Lo (), Guicai Li and Yingquan Jiang
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Dic Lo: School of Oriental and African Studies, University of London; Center of Research in Comparative Political Economy, Renmin University of China.
Guicai Li: School of Economics, Jilin University of Economics and Finance, China.
Yingquan Jiang: School of Oriental and African Studies, University of London.

PSL Quarterly Review, 2011, vol. 64, issue 258, 267-286

Abstract: Despite fundamental market reforms, the Chinese financial system has remained a mixed system. From the perspectives of the mainstream doctrines of financial liberalization, this system is easily judged to be entailing serious allocative inefficiencies. Nevertheless, from alternative theoretical perspectives, the system might have been conducive to promoting productive efficiency. This paper argues that the actual experience does seem to indicate that, hitherto, the gains in productive efficiency have more than compensated for the losses in allocative efficiency. This judgement helps to make sense of the Chinese anomaly that a seemingly inefficient financial system has co-existed with the outstanding performance of financial deepening and economic development over the past three decades.

Keywords: Chinese banks; market reforms; economic development (search for similar items in EconPapers)
JEL-codes: G21 N65 O16 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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