Austerity and Moral Compromise: Lessons from the Development of China’s Banking System

Tobin, Damian

Abstract

China’s state-owned banks have demonstrated a tremendous capacity for change, but their implications for development policy are often unclear. The paper examines why the pre-reform banking system based on moral compromise almost seamlessly changed to one based on self-advancement. Focusing on a period when resources were desperately short, the paper argues that China’s great advantage has been Hong Kong and the safe access to international markets it provided. Consequently China’s leadership are more familiar with international markets than is often assumed, and although capitalism is no longer exceptional, access to formal institutions continues to be a core development priority in achieving modernization.

Citation

Tobin, D. (2011). Austerity and Moral Compromise: Lessons from the Development of China’s Banking System. World Development, 39(5), 700-711. https://doi.org/10.1016/j.worlddev.2010.10.002

• Journal Article Type: Article
• Acceptance Date: Oct 4, 2010
• Publication Date: May 1, 2011
• Deposit Date: Nov 30, 2010
• Journal: World Development
• Print ISSN: 0305-750X
• Electronic ISSN: 1873-5991
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 39
• Issue: 5
• Pages: 700-711
• DOI: https://doi.org/10.1016/j.worlddev.2010.10.002
• Keywords: Asia, China, Banking, Institutions, Economic Systems, Trade
• Publisher URL: http://www.sciencedirect.com/science/article/pii/S0305750X10002214