Country Attractiveness Report
Alex V Sukhodolov
Business in Asia
Recent trends on borrowing and payment system for instance, in salary payment, debt payment, mortgage borrowing and payment as well as other loan services, more and more industries and institutions are dependent on banks more than ever before. This high dependability on banks is in fact making this banking industry highly competitive and concentrated as discussed below. As these industries take their time to analyze the merits and demerits of each bank in the industry and which is likely to benefit them more, the banks on the other hand strive to make their ...view middle of the document...
The paper will address benefits as well as the drawbacks relating to contravention of large banks before deciding on whether the government has made a wise decision.
Chinese Banking Sector
Chinese banking sector has an issue on governance that addresses matter on failures within the banking sector. Chinese banking sector is highly focused on issues that have an economic aspect with new ways that will maintain progress and move issue on political aspects. In China, there have been well laid programs and initiatives that are equitable and have been applied to consider investment levels with provision of information which contributes to the banking sector to improve production and knowledge levels.
What is advocated is a good governance concept where the relationship of the sectors within the organization is arranged to attain a certain level of standardization. Similarly, development of networking sites and procedures to equitable governance contributes to promotions of worldwide relation and influences. This has enhanced an equitable financial flow within China and globally with consideration of soft and hard powers of banking sector viewed on economic changes and developments (Shen, 2013).
Credit unions in China are set by central bank and in such cases; they are applied for better operations. The central bank has powers and mandate of developing and setting regulations and codes that are held with a code of fitness on credit unions and introduction of new standards. Other orders are as well signed by relevant parties such as ministers of finance with the aim of trying to secure the banking sectors. As well, there is an issue on support of microfinance scheme which in real sense is set and designed to establish a process and a restructure of China’s banking sectors.
These schemes can ensure that there is an equitable way of mitigating the commercial viable risks in the banking sector and those related to the finances. Some of the risky areas that will be curbed by these setting are the corruption since the establishment of the rule will act as the watchdog function of the banking sectors. This will help in building an overall development report that will be addressing the challenges that are more likely to touch the sector all along. Finally, such practices will assist in the strengthening of the relative market and the states as well as developing the civil society efficiency (Shao, 2014).
Many economists and even politicians blame universal banking system for the 2008 financial crisis. Those for separation of large banks argue that large banks are less stable as compared to those that have specialized in particular areas. This is because universal banks have to deal with more business activities hence are more vulnerable to financial risks than commercial banks. For example, sale of securities pose a threat to their stability. A large bank can easily destroy its reputation if it sells securities that are...