Publication: China Financial Sector Assessment
Date
2017-11
ISSN
Published
2017-11
Author(s)
World Bank
International Monetary Fund
Abstract
Since the 2011 financial sector
assessment program (FSAP), China’s economic growth has
remained strong, although a necessary economic
transformation is underway. China now has the world’s
largest gross domestic product (GDP) in public private
partnership (PPP) terms, and poverty rates have fallen.
However, medium-term growth prospects have moderated. The
economic transformation requires a fundamental change in the
role of the financial system. Although longer-term
objectives are clear, policymakers continue to face
challenges in balancing short-term growth concerns with
long-term financial stability and sustainability. The slow
pace of state-owned enterprise (SOEs) reform and limited
exit of weak firms have resulted in efficiency losses and
reinforced the perception of implicit guarantees. Contingent
fiscal liabilities have also grown rapidly. Addressing these
tensions is challenging in the context of the strong
presence of the state in the financial sector. Maintaining
financial stability will also require that remaining gaps in
regulatory frameworks be addressed. Further enhancements to
crisis management frameworks are needed to allow financial
institutions to fail in a manner that minimizes the impact
on financial stability and public resources.
Citation
“World Bank; International Monetary Fund. 2017. China Financial Sector Assessment; China Financial Sector Assessment. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/28991 License: CC BY 3.0 IGO.”