Arab Today, arab today world bank warns china over state financial control
Last Updated : GMT 13:22:57
Arab Today, arab today
Arab Today, arab today

Failure could end '3 decades of stellar performance'

World Bank warns China over state financial control

Arab Today, arab today

Arab Today, arab today World Bank warns China over state financial control

China's three-decade economic boom is at risk
Beijing - Arab Today

The World Bank on Wednesday urged China to accelerate reform of its state-dominated financial sector, warning that failure to address the issue could end "three decades of stellar performance" for the world's second-largest economy.

The ruling Communist Party has pledged a wide range of economic reforms and the Washington-based institution said reducing the "unique and distorted role of the state" in banking and the wider financial sector was crucial.

"Wasteful investment, overindebtedness, and a weakly regulated shadow-banking system," had to be addressed for the broader agenda to succeed, it said.

The comments in the China Economic Update were unusually forthright for the World Bank.

"Unlike other countries, in China the state still maintains pervasive ownership and control of banks and other financial institutions," it said, including with powerful internal Communist Party committees and authorities appointing and dismissing top executives.

"The state has formal ownership of 65 percent of commercial bank assets and de facto control of 95 percent of these assets, making it an outlier by international standards."

In some cases, it added, authorities were simultaneously owners, regulators and customers of banks.

China's financial system was still "unbalanced, repressed, costly to maintain, and potentially unstable", the bank said, repeating its description from a 2012 report.

"Urgency for fundamental reform has further intensified as excess capacity and indebtedness in many economic segments accumulate, amid growing evidence of financial distress," it said.

"Failure to address these outcomes could deflect the economic trajectory after three decades of stellar performance."

In the document, the World Bank left its economic growth estimate for China this year at 7.1 percent.

"Progress in rebalancing the sources of growth in domestic demand will remain incremental," it said.

China's leaders are trying to engineer a transformation of the country's growth model whereby consumer demand becomes the main driver rather than investment.

"China’s financial system was developed to serve the old investment-driven growth model, effective during earlier phases but less so now," the World Bank said.

"So, reforms should enable the financial system to reallocate... credit to those sectors that can maintain reasonable growth over the medium-term."

China itself has set a target of about 7.0 percent growth in gross domestic product (GDP) for this year, though weak data during the first half of the year has led many private economists to expect that growth this year could come in below that figure.

The World Bank also kept its GDP growth forecast for next year in China at 7.0 percent and at 6.9 percent in 2017.
Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today world bank warns china over state financial control Arab Today, arab today world bank warns china over state financial control

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today world bank warns china over state financial control Arab Today, arab today world bank warns china over state financial control

 



Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Zainab Fadel Oglu designs “Shakerin” mosque

GMT 12:13 2017 Thursday ,11 May

Zainab Fadel Oglu designs “Shakerin” mosque
Arab Today, arab today Seeks to move past rift with Israel

GMT 08:00 2017 Monday ,08 May

Seeks to move past rift with Israel
View News in Arabic - Business: أخبار الأعمال
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Mozambique's gas boom dream under threat

GMT 16:29 2017 Monday ,08 May

Mozambique's gas boom dream under threat
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Jaguar displays XF Sportbrake line

GMT 14:36 2017 Monday ,08 May

Jaguar displays XF Sportbrake line
Arab Today, arab today BMW sees forecasts in reach

GMT 09:04 2017 Thursday ,04 May

BMW sees forecasts in reach
Arab Today, arab today Climate science: Bad news gets worse

GMT 08:48 2017 Saturday ,06 May

Climate science: Bad news gets worse
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday