Risks in China's Financial System
By Zheng Song, Wei Xiong. Annual Review of Financial Economics, 2018
229 citations recorded by the source corpus.
Motivated by growing concerns about the risks and instability of China's financial system, this article reviews several commonly perceived financial risks and discusses their roots in China's politico-economic institutions. We emphasize the need to evaluate these risks within China's unique economic and financial systems, in which the state and nonstate sectors coexist and the financial system serves as a key tool of the government to fund its economic policies. Overall, we argue that ( a) a financial crisis is unlikely to happen in the near future and ( b) the ultimate risk lies with China's economic growth, as a vicious circle of distortions in the financial system lowers the efficiency of capital allocation and economic growth and will eventually exacerbate financial risks in the long run.
Subfields: Economics and Econometrics, Finance, Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/6169df5b2447a57c17e98cf31f0f000b838764d1
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Citations in the corpus
- Size and value in China (2019, unknown): “Model CH-3 dominates FF-3 not only in the frequentist comparisons reported in Table 5 but also in a Bayesian comparison that follows the Stambaugh and Yuan (2017) procedure in applying the analysis of Barillas and Shanken (2018).”
- Subnational Debt of China: The Politics-Finance Nexus (2016, background): “4 The risks in China’s financial system have been the subject of many public debates and academic studies (e.g., Allen, Qian and Qian (2005); Allen et al. (2019); Song and Xiong (2018)).”