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The Changing Financial Infrastructure in China and What it Means for Your Business

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Summary

China, in terms of financial infrastructure, is a unique country and the unprecedented growth in recent times has astounded the world. However, sustaining a stable financial infrastructure is difficult for any country, where boom and bust cycles are common and any system reforms seem to be followed by periods of crisis. Important for China, is to improve supervisory regimes without affecting the operational conditions of the financial institutions. Luckily, the Chinese people hold a different social and economic tradition that has helped to create a secure buffering environment for any financial reforms and has helped in preventing the full impact of the crisis currently being experienced overseas.

The WTO has been offering key advice to enable China to learn from international experience and prosper within a new financial infrastructure. Such initial changes within five years after accession (2001) included allowing foreign financial institutions to provide foreign currency services without restrictions and doing business in RMB with Chinese individuals, even in local areas. This has led on to China creating regulatory bodies to help define a well-balanced regulations system and they have not been afraid to recruit foreign experience to do this. The outcome has been huge investment interest across all sectors.