Efficiency And Stability In China: The Contradiction In China's Gradualist Banking Reforms

China's bank-dominated financial system remains the Achilles heel of China's economy. China began reforming the largest state-owned commercial banks in 2003 to improve their competitiveness in anticipation of China joining the World Trade Organization in 2008. Although the reforms have improved bank performance, underlying problems remain. In the study "The Contradiction in China's Gradualist Banking Reforms," University of Chicago Graduate School of Business professor Anil K Kashyap and Wendy Dobson of the University of Toronto's Rotman School of Management survey the recent reforms of China's banking industry. China's largest banks have undergone significant changes following China's commitment to join the World Trade Organization and open the domestic banking market by December 2006.