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Financial Environment Analysis

China Financial System
The China financial system is highly regulated and relatively underdeveloped, but has recently begun to expand rapidly as monetary policy becomes integral to its overall economic policy. As a result, banks are becoming more important to the economy by providing increasingly more finance to enterprises for investment, seeking deposits from the public to mop up excess liquidity, and lending money to the government.
As would be expected, the China banking system is also highly regulated with six major banks, each having specific tasks and duties. The People's Bank of China is the largest bank in the PRC and acts as the Treasury. It also issues currency, monitors money supply, regulates monetary organizations and formulates monetary policy for the State Council. The Bank of China manages foreign exchange transactions and manages foreign exchange reserves. The China Investment Bank distributes foreign capital from a variety of so...

Posted by: Raymon Androckitis

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