China's Emerging Markets

Paper Summary:

This paper takes a look at the history of China's national economy, based on the perspective of PT Bauer's theory of economic attainment and achievement. It then goes on to review and discuss China's current economic situation focusing on China's emerging markets and transitional economic position. The paper further discusses the role of the Bank of China in this economy.

From the Paper:

"Today, in China, the state has managed to change its policies in providing funding to various state-owned enterprises, from appropriations to loans, and this has had the result that the original free appropriation relationship that existed between state-owned enterprises and banks broke completely. This in turn meant that they were replaced by credit relations on commercial terms, and this means that loans for the domestic banks would serve as the most important channels and the main marks for the marketization of capital in China. The proportion taken up by domestic loans therefore may be partially used to measure the marketization of the capital of China. Upon an intensive study, it was revealed that the loans for the state policy banks, witnessed from either the absolute quantity or the relative quantity, showed a reducing trend since 1997. This also means that while there has been a sharp growth in the loans from commercial banks, which attained 92 percent in 2001, they also occupied an absolutely dominating position. This means a remarkably high degree of marketization of capital in China. Therefore, it can be stated that marketization in China has today reached much higher levels than ever before. (Comprehensive analysis on marketization of capital in China)"

Sample of Sources Used:

• Comprehensive analysis on marketization of capital in China. Retrieved Fromhttp://www.china.org.cn/english/2003chinamarket/79498.htm Accessed 17 March, 2006
• Dorn, James A. China in the New Millennium, Market reforms and Social Development. Cato Institute. 1998.
• Green, Stephen Paul. The Development of China's stock market, 1984 to 2002, Equity politics and economic institutions. Routledge (UK). 2004.
• Lin, Justin Yifu; Cai, Fang; Li, Zhou. The Lessons of China's Transition to a Market Economy. The CATO Journal. Vol: 16; No: 2; pp: 37-40
• McMillan, John; Naughton, Barry. How to Reform a Planned Economy, Lessons from China. Oxford Review of Economic Policy. 1992. Vol: 8; No: 1; pp: 130-143.

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