Privatization Of China

The Chinese government for 30 years has been reforming its economy to the standards of the United States and western European countries. They have been trying to make a market economy, that democratic countries use. Many believe that is very strange for a Communist nation approaching towards a democratic approach. But with its expanding population , which already at 3 billion, they need this step to support the country. Most of the economic structures in China like railways, telecommunication, banking and utility have been all managed by government controlled agencies, but in the last 20 years, the power has been shifted to state owned companies. China has also reformed its banking system to support its growth, the four major banks of China, IBC, ABC,BOC,and CCB have outmatched American banks in Assets, loans, and profits and branches from the bank of America.

Back in the old days, their were many corrupt officials , because of bad loans made by the banks, not knowing if the credit was bad and when it was going to be paid. The Chinese government is still trying to reform its economy to compete with foreign banks, or all they have done so far will be for nothing.

Even if the reforms keep happening in China, foreign banks will over power the Chinese banks. The Chinese have made considerable advances towards market economy, but most of the profits of the banks are government owned banks, which means they are far off from the democratic western banks, which have no control form the government. I think it will take many years for the Chinese to adapt the market system, but unfortunately its very hard to do when its still a Communist country. In the near future, foreign banks will take the clients of the Chinese banks and use them against them for profit. The western European banks are more liberal and have more freedom in loans, profits and assets then Government owned Chinese banks. In my opinion it will take years for the Chinese to

catch up to European banks.