THE EVOLUTION OF CHINA’S ECONOMIC MODEL AND CHINA’S MODERN BANKING HISTORY (1840–2007). AN ANALYSIS BASED ON INVESTMENT INCENTIVES AND RISK CONTROL

Abstract

Before 1840, China had not made the transition to the Industrial Revolution, and its monetary
system was different from the Western monetary system. As is evident from China’s banking
history from 1840 to 1949, despite more than 100 years of effort, China still had not succeeded
in establishing a complete modern industrial economic model. After 1949, China destroyed the
modern commercial and banking system that was emerging and established the fiscal-monetary system of the planned economy on which it went on to build an industrial system. After
1978, China redeveloped its modern commercial system and in 1993 China reestablished a
modern banking system. From the perspective of investment incentives and risk control, the
evolution of China’s economic model is not only a learning process about Western culture but
is also a process during which the Chinese preserved and developed their traditional culture