China’s reform of its banking system

The first important area of reform has been a steady advance in the pilot share-holding scheme in the wholly state-owned commercial banks. To strengthen the banking system, it is important to carry out the financial reform in a timely manner. Special government bonds totalling Rmb270 billion were issued in 1998 to recapitalise the four state-owned commercial banks, and four asset management companies were established in 1999 to take over their non-performing assets of nearly RMB1.4 trillion. Mor