The Emergence of the New Chinese Banking System: Implications for Global Politics and the Future of Financial Reform

As the current financial crisis spreads from country to country around the world, China’s new-found financial and political power is dominating global, financial, and political arenas. China’s recent rise to power deserves increased scrutiny as China’s experience may offer lessons and models for other countries struggling with financial chaos. These remarks begin a dialogue over the lessons that can be learned from China’ ascent to power, and considers some of implications of China’s rise. It also contrasts China’s experience with that of Western countries, who have approached financial reform from entirely different perspectives. After considering these perspectives, and providing an overview of the Chinese banking system, these remarks explain how China developed a system with strong state control in contrast to the U.S. free-market system, and questions which model will be more successful in moderating the current financial crisis. In sum, the questions around how China rose to power, and is seeking to use this power, is necessary to an understanding of how other countries may evaluate financial reform and develop effective solutions to global financial problems