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Financial Liberalisation and Growth in China’s Economic Reform
Author(s) -
Li KuiWai,
Liu Tung
Publication year - 2001
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/1467-9701.00375
Subject(s) - liberalization , appropriation , investment (military) , foreign direct investment , economics , china , financial system , finance , government (linguistics) , open ended investment company , economic policy , international economics , business , monetary economics , market economy , production (economics) , return on investment , macroeconomics , politics , linguistics , philosophy , political science , law
This paper summarises China’s financial liberalisation experience and examines the contributions of financial resources on economic growth during the post‐reform period. Financial liberalisation has resulted in the reallocation of the four sources of total investment in fixed assets: state budget appropriation, national bank loans, self‐raised funds, and foreign investment. We find that the growth of GDP and industrial production are positively related to the growth of self‐raised funds and foreign investment. We conclude that the use of foreign investment and funds raised by the enterprises themselves are more efficient than the government’s appropriation and provision of bank loans.