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The Case for Financial Reform in China
Article

The Case for Financial Reform in China

Henry M. Paulson Jr.
BFA, 2013
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Editorial Rating

8

Qualities

  • Analytical
  • Insider's Take

Recommendation

According to former US Treasury secretary Henry M. Paulson Jr., China should continue to reform its financial sector. Paulson offers his personal, candid opinions regarding China’s current economic standpoint. He addresses numerous deficiencies in its existing financial framework and offers China a way forward. getAbstract recommends this article to investors and bankers with an interest in China and the future of its financial sector.

Summary

Capital markets are vital to economic growth. They allow individuals and businesses to become wealthier and to innovate. Now that China’s leaders are seeking a “balance between growth and sustainability,” adopting financial sector reforms is critical. The Chinese government currently pumps inexpensive credit into its state-owned enterprises, giving these protected firms little incentive to perform competitively and drawing funds away from productive private-sector ventures. Meanwhile, Chinese savers lack good investment opportunities and face negative returns due to inflation and low interest rates.

During the past several years, China has come...

About the Author

Henry M. Paulson Jr. is chairman of the Paulson Institute and a former US Treasury secretary.

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