Author

Juan J. Zhou

Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2005

Capstone Advisor

Elletta Callahan

Honors Reader

Peter Koveos

Capstone Major

Finance

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Social Sciences

Subject Categories

Economics | Finance

Abstract

Chinahas risen to the forefront of international scrutiny because of its unique political and economic structure and evolution. The growth and development ofChinaas a world economic power has resulted from the political-economic reform efforts of Communist leaders withinChina. Under Mao Ze Dong, during the pre-socialistic modernization period,Chinabegan its reform of rehabilitation from war time and social-economic restructuring by instituting socialistic ideology. During the Dengist period under Deng Xiao Ping, there was a transition from an agricultural to an industrial economy. After Deng, socialist modernization reform has continued underChina’s hybrid capitalistic economic model, with particularly significant effects on the rapidly structured financial market. Entrenched with the withinChina’s hybrid capitalistic economic model are the politically and socially inextricable characteristics of which are based on generations of behavior. Reform inefficiencies have resulted from state enterprises that lacked control, financial structure, and balance between state and private behavior. The evolving capital market withinChinafaced serious problems due to inefficiencies within state sector enterprises’ financial system. Moreover, the banking system withinChinais inefficient and poorly organized. Problematic issues such as financial institutions’ weak intermediary role, disorganization of financial assets, and unstable lending policy has been masked by the public’s trust in the state and political-social behavior of Chinese enterprises. However, in order to transitionChina’s banking system to modern practice, bank intermediation, capital asset balance, and foreign investment decontrol must be established. Creating a modern financial system inChinawill rely on reforming behavior as much, if not more than the reformation of policy.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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