Bulletin – September Quarter 2012
The Chinese Banking System
Grant Turner, Nicholas Tan and Dena Sadeghian
The Chinese banking system is critical to the functioning of the Chinese economy, being the main conduit through which savings are allocated to investment opportunities. Banking activity in China has grown rapidly over the past decade in association with the expansion of the Chinese economy, and the Chinese banking system now includes some of the world's largest banks. Chinese banks have become more commercially orientated over this period, although the Chinese Government retains considerable influence over their activities. This article examines the size and structure of the Chinese banking system and the key characteristics of banking activity in China. The regulatory and institutional arrangements for banking in China are also outlined.