The Evolution of Bank Lending Patterns in China: A Post-1994 Province-by-Province Analysis

Abstract

Disaggregated province-by-province analysis appears to confirm the importance of ongoing redistributive lending by the big four Chinese banks together with lending to state-owned enterprises that is especially pronounced amongst the poorer provinces. Agricultural Bank of China's own allocation of loans to the weaker provinces surges after 2000. This may well reflect its greater presence in the poorer areas of the country and the potential damage exerted if its lending there were cut back. On the other hand, such lending patterns also make it unsurprising that Agricultural Bank of China has not yet followed the other big banks into public ownership.