The Progressive

China’s financial system: big, powerful and still state-run


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Podcast: The Sound of Economics (LS 33 · TOP 5% what is this?)
Episode: China’s financial system: big, powerful and still state-run
Pub date: 2026-02-18

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China’s banking sector has expanded from a fragile, state-dominated system in the 1990s into the largest in the world. But this increased scale has not brought with it a shift toward market-driven finance, with the core logic of state-directed control over credit remaining a central feature of Chinese banking. In this episode of The Sound of Economics, Yuyun Zhan sits down with Alicia García-Herrero and Fraser Howie to examine how banks continue to serve state priorities, funnelling household savings into politically favoured sectors while sustaining local governments and state-owned firms.

This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!



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The ProgressiveBy The Syllabus / Listen Notes