Abstract
The article outlines the role of state in the evolution of commercial banks in China. It looks at different stages of its development process. The paper engages with the deepening of state led financial reforms which led to the competitive advantage of China's commercial banking industry. The state-owned commercial banks, large joint-stock commercial banks, and small private commercial banks keep increasing their strengths due to regulations and monitoring by the Chinese state. Therefore, the article argues that state-owned commercial banks have relatively large market share and dominate in commercial banking sector due to the state.
Highlights
There was a mono-bank system prior to the 1978 reform in China
The state-owned large-scale commercial banks are the pillar of China's economy
Bank of Communications among five state-owned commercial banks raising more than two billion dollars through the IPO in Hong Kong in 2005 is the first bank listed in stock exchange while CCB, BOC and ICBC issued their IPOs respectively in 2005 and 2006
Summary
There was a mono-bank system prior to the 1978 reform in China. From 1948 to 1978, China implemented a planned economic system with advanced tactics for production materials and products. The state-owned large-scale commercial banks are the pillar of China's economy They have become real commercial banks in response to banking reforms, and have gradually become modern enterprises (Jiao and Zhang, 2009). Joint-stock commercial banks, which play increasingly important roles in the market-oriented reform of China's commercial banks and in deepening the improvement of the financial system are mainly to assist the development of the entire commercial bank. Domestic joint-stock commercial banks are indispensable, which have a proper governance structure; the scale of joint-stock business is between large state-owned commercial banks and other commercial banks Their customer orientation is mainly medium-sized enterprises, which can be penetrated by both sides, and there is an expansion capacity for future development (Yuan, 2014). Other financial institutions have improved China’s financial organisational system and played an increasingly important role in advancing China’s economic transformation, technological transformation, optimising industrial structure, and increasing the added value of the industrial chain
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