The Influence of Hong Kong Banking Law on Banking Reform in the PRC

Abstract

After the hand over of Hong Kong by the United Kingdom to the People's Republic of China ("PRC"), some commentators predicted that China would interfere with Hong Kong's economy and legal system despite the Basic Law's protections. This Article argues that in the area of financial supervision, particularly bank supervision, the Hong Kong Special Administrative Region has significantly influenced banking reform in the PRC. The PRC's implementation and development of bank supervisory standards that approach compliance with international financial standards has been significantly influenced by the Hong Kong Monetary Authority ("HKMA"), Hong Kong's central bank, through both informal and formal contacts between HKMA officials and PRC bank supervisory officials. The Article briefly analyzes the PRC banking system, provides a short history of banking reform in the PRC, describes the influence of the HKMA and the Hong Kong financial sector generally on the PRC banking reform efforts, and finally examines the prospects of continuing Hong Kong influences on PRC banking reform.

Keywords: banking law, Hong Kong, China, comparative law