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The Political Economy of State Capitalism and Shadow Banking in China

Authors Tsai, Kellee Sing View this author's profile
Issue Date 2015
Source Issues and Studies , v. 51, (1), 2015, p. 55-97
Summary The Xi-Li administration faces the dual challenge of managing state capitalism and shadow banking as China enters a phase of more moderate economic growth. During China's first three decades of reform, private sector development occurred in parallel with prioritization of state-owned enterprises in strategic industries, and growth surged. This pattern of state capitalism rested on an unarticulated bifurcated financing arrangement whereby the formal banking system primarily served public enterprises, while private businesses relied primarily on informal finance. However, China's response to global financial crisis disrupted the preceding equilibrium of financial dualism under state capitalism. Unprecedented expansion of bank lending after 2008 created opportunities for a host of state economic actors-including SOEs, state banks, and local governments-to expand their participation in off-balance sheet activities. © Institute of International Relations, National Chengchi University, Taipei, Taiwan (ROC).
ISSN 1013-2511
Language English
Format Conference paper
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