Dunren Zhou, Fudan University, Shanghai

Invitation to ARC/NIAS seminar:

China’s Financial Sector:The Weak Link in theChinese Economy

Presentation by Professor Dunren Zhou, FudanUniversity, Shanghai

Abstract:

Most of the financial activities are done through banks in China, with the Big Four state banks accounting for a big share of the market. State banks have always been “protected” and are inherently resisting reform changes. As a result, non-performing loans and capital inadequacy are perplexing issues. Now as a bold move, China allows foreign banks to acquire a certain amount of the equity of Chinese banks as strategic investors. The intentions and  possible results are to be discussed.

Stock markets in China are now deeply mired down and efforts to stimulate the investors’ interest and raise the price index have so far been disappointing. However, more drastic measures are either being undertaken or considered. Stock markets and the much smaller bond markets are necessary in a healthy financial market to alleviate the over-dependency on the banks.

The Chinese currency RMB is under international pressures for appreciation. The pros and cons for significant changes of the currency exchange regime and rates will be looked at. Obviously, the currency issue looms big as China is now the third largest trading nation in the world.

Dunren Zhou is Senior Professor, Deputy Director and co-founder of the Center for American Studies at FudanUniversity, the first think tank on a Chinese campus. He is also Senior Research Fellow and Deputy Director of the Pudong Institute for US Economy, which covers international economic relations.

This seminar is one in a series on Challenges to Communist Party Rule in China, organized jointly by CBS’ Asia Research Centre and NIAS.

The seminar is open to everyone and attendance is free.