China WTO and the Financial Sector

Abstract

China's financial system remains an area of weakness and a recent audit carried out by the National Audit Office made the point that "China's three largest state banks still lack proper risk control procedures." The audit also stated that the 'loan application procedures, particularly at the branch level, are not strict enough where they knew the applicant." This was a deliberately nuanced statement attempting to point out that the system still remained one where the local party chief made the recommendation and the loan was sanctioned without any attempt to carry out the due diligence responsibilities before the bank concerned committed itself to making the loan. The audit report which was posted on the official web site was immediately withdrawn. Attempted below is an examination of Chian 's financial system which today stands to an extent more open to global influences because of the compliance by Beijing with its wro commitments.