| ID | 086324 |
| Title Proper | How banks in China make lending decisions |
| Language | ENG |
| Author | Yeung, Godfrey |
| Publication | 2009. |
| Summary / Abstract (Note) | Based on interviews conducted in four major Chinese cities, this paper examines the determinants of lending by state-owned commercial banks (SOCBs) to manufacturing firms in China. The conventional relationship banking and transaction lending theories helps explain at least part of the lender-borrower relationship in China. The perceived lending bias against non-state-owned enterprises could actually be reconciled as rational decision-making by SOCBs, partly due to the higher risk involved and/or high transaction costs in the risk evaluation of such lending. The existence of unofficial lending criteria at SOCBs nonetheless provides golden rent-seeking opportunities for unscrupulous bankers to exploit the regulatory loopholes for financial gain. |
| `In' analytical Note | Journal of Contemporary China Vol. 18, No. 59; Mar 2009: p.285 - 302 |
| Journal Source | Journal of Contemporary China Vol. 18, No. 59; Mar 2009: p.285 - 302 |
| Key Words | Lending Decisions ; China ; Chinese Cities ; Banking and Transaction Lending Theories |