China’s Banking Has A Long Way to Go

In some way, the low degree of internationalization and less intensive competition, these defects of China’s banking on the contrary help itself to avoid suffering great losses in the financial crisis, it just like a person who does not know to swim will not be drowned if he never down to the water, of course it is a safe way to stay on shore, however for China it is maybe not a positive way to develop banking sector like this, that is because the China’s banking will be internationalized sooner or later, and it is undesirable and impossible to only rely on government bailouts when financial crisis happens again. Therefore, it is worth considering how China’s banking can obtain steady and healthy development in the international and domestic market.

I think that in the post-crisis era, China’s banking should go back to basics, it should focus on improving the domestic banking market firstly and then develop the international business. Obviously, strengthening banking reform is imperative, the banking sector should speed up the formation of healthy competition and then be able to offer sufficient financial products to meet the increasing need of the real economy, rather than the over-virtualization economy, meanwhile, well-designed regulation and appropriate monetary policy can serve the development of the banking sector better, only by doing so, in the near future China’s banking would get rid of troubles such as refinancing problem. With no doubt, China’s banking has a long way to go.