This article discusses how Guo Shuqing, a stock market regulator tried to bring market-oriented changes to China's murky, debt-laden banking system. Guo was selected as chairman of the China Banking Regulatory Commission last Friday. Experts believe that the weak China financial system is holding its economy back. Bad loans are expected to rise as the economy continues to slow. Also, banks have become more dependent on raising money through speculative investment products that they hide from the government, making it difficult to assess the risks they pose to economic stability. China had tried to shuffle their leadership positions in the banking system in hope of fighting money laundering, capital flights, thus strengthing the financial system.
China needs new leadership and new policy changes in order to set its foot on the right track to help China's fraud-ridden and heavily politicized financial system. Mr. Guo is a rare example of someone who has had extensive experience in both political and economic experience in China. He worked at the China Securities Regulatory Commission, the top stock market regulator and achieved a series of reforms in just 17 months. However, Mr. Guo does not have much time, who will be turning 61 this year. The ministers who run the central bank and the main regulatory commissions usually retire at the age of 65. I really look forward to what kinds of reforms Mr. Guo will bring to the Chinese financial system.
Link to article: https://www.nytimes.com/2017/02/24/business/china-banks-guo-shuqing.html?ref=business
2 comments:
It will be interesting to see what reforms he makes in the banking system in China. China is a major economic powerhouse in the world and if it cannot fix its problems the result could be bad for not just China but others invested in China. I hope that Mr. Guo can fix some problems before he retires as he seems like a super qualified person to make changes.
As far as I know, these years, China has taken effort on the commercialization of state-owned banks. Some private banks are introduced in the bank system but the openness level is still extremely low. These years, Chinese economy and finance have met a lot of challenges. Problems like bad loans and speculative investment are becoming more and more serious, destabilizing the national economy. I really expect to see what Mr. Guo will do to solve these problems.
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