CHINESE BANKING SECTOR IN TRANSITION: ANY LESSONS FROM POLAND?

At the end of the twentieth century Asia, and especially China, has rapidly integrated with the world economy. It has been recently confirmed by China’s accession to the World Trade Organisation. While this process has been possible due to Chinese fast economic growth, inefficient banking sector appears as a major threat that may shake the stability of the Middle Country in the future. The dissertation focuses on reforms and challenges facing Chinese banking sector, but it also includes other interrelated aspects like privatisation and development of regulatory institutions. This study analyses the experiences of Polish transformation in banking sector and compares it to the situation in China. This paper investigates the present situation in China in banking sector, the reasons behind it and the correlations that are responsible for shaping it. The comparison with Poland is used here to show which solutions applied in other transformation countries may be helpful in China, but also to claim that their successfulness hinges on internal conditions in China. It is argued that to change the situation in Chinese banking sector the government’s engagement in the sector has to be limited and the importance need to be put on regulatory arrangements. Key words: banking sector, privatisation, state-owned banks, nonperforming loans, economic reform