Abstract
The stagnation in banking sector reform is puzzling given the Chinese leadership's seeming resolve to reform other sectors of the economy. This article develops a political explanation of why reform oriented central bureaucrats have centralized financial power without liberalizing the banking sector. The starting point of this explanation is that top bureaucrats value political survival as much as other members of the Politburo. Thus, they make policies based on both political and economic considerations. This framework is tested on three cases related to China's non-performing loan (NPL) problem: the politicization of the NPL problem, policies designed to slow the creation of NPLs and policies aimed at decreasing the pool of NPLs. The findings strongly suggest that political considerations play a large role in shaping financial policies in China.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
