Weekend Long Read: As China Reforms Its Financial System, Pragmatism Should Prevail

In the early days of the economic reform and opening-up, many of China’s financial policies were based on the European and U.S. financial systems. However, when the global financial crisis broke out in 2008, the trajectory of China’s financial reform became a big concern for policymakers.

Looking back at 1978, when the policy of reform and opening-up was established, the People’s Bank of China (PBOC) was the sole financial institution, since there was little demand for financial intermediaries in the planned economy and the allocation of funds was determined solely by the central government.