For more than 40 years after China set out to promote economic systems reform and an open-door policy, the country’s financial sector went through periods of serious economic overheating, saddled with huge nonperforming loans and experiencing violent fluctuations in stock prices. But it has incorporated market factors in stages and has generally supported economic growth through an abundant supply of funds.
However, China’s financial system reforms are only half completed. If China wants to secure financial power to match its status as the world’s second-largest economy, it has to clear some difficult hurdles.
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