Financial reforms in Chinese banking: The impact on personal lending and operational efficiency

The Chinese financial system has historically been one of secrecy, distrust, and corruption. The process does not align with the western standards of transparency and auditing. In contrast to the transaction–based business culture of the West, Chinese business society is relationship-based (quanxi), which still seems to play a key role in the credit decision. With the growth of the emerging middle class, access to financial instruments such as credit cards, life insurance, stock purchases, and the like will play a greater role in the life of the Chinese consumer. Based on these forecasts, the authors recommend seven actions to manage financial activities in China, all of which are explored within this article.