Changing Environment for Opening of Chinese Financial Sector and Implications

5 Pages Posted: 23 Jul 2021

See all articles by Sangbaek Hyun

Sangbaek Hyun

Korea Institute for International Economic Policy

Su Yeob Na

Korea Institute for International Economic Policy

Youngsun Kim

Korea Institute for International Economic Policy

Koun Cho

Korea Institute for International Economic Policy

Bongkyo SEO

Dongduk Women's University

Date Written: April 22, 2021

Abstract

The opening of China's financial sector has progressed at a very slow pace, unlike the manufacturing and trade sectors that have pushed for an active opening to the outside world. The Chinese economy has been growing rapidly while serving as a global production base, but since 2012, it has become necessary to modify its approaches to achieve growth as it enters an era of medium-speed growth. Recently, new reform and opening measures have been taken in various fields to improve the quality of the Chinese economy, and the need for reform and opening in the financial sector has also increased.

Internally, the financial system centered on China's state-owned commercial banks has focused on indirect financing, which has served as a major obstacle to upgrading China's economy and industry to the next level, further increasing the need for reform and opening of the financial sector. Moreover, externally, the U.S.-China conflict which began in earnest in 2018, is applying strong pressure toward reform and opening in China’s financial sector.

The Chinese government began to show a proactive attitude toward financial opening amid such internal needs and external pressure, and an important development was seen in China’s financial opening when President Xi Jinping declared further opening measures at the Boao Forum in April 2018. The Chinese financial authorities have prepared follow-up measures related to financial opening, and the Chinese government’s efforts toward financial opening in the three years from 2018 to 2020 yielded more results than the ten-year opening period since its accession to the WTO.

Against this backdrop, this study examines the main contents of China’s financial opening process, which has been accelerating recently, and derives evaluation and implications.

Suggested Citation

Hyun, Sangbaek and Na, Su Yeob and Kim, Youngsun and Cho, Koun and SEO, Bongkyo, Changing Environment for Opening of Chinese Financial Sector and Implications (April 22, 2021). KIEP Research Paper, World Economy Brief 21-25, Available at SSRN: https://ssrn.com/abstract=3885408 or http://dx.doi.org/10.2139/ssrn.3885408

Sangbaek Hyun (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Su Yeob Na

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Youngsun Kim

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Koun Cho

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Bongkyo SEO

Dongduk Women's University ( email )

23-1 Wolgok-dong
Sungbuk-gu
Seoul
Korea

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