Policy Issues of China’s Financial Globalization

Since the opening-up of China’s economy, its capital markets have grown fairly rapidly, albeit from a small base. These markets provide a growing source of funds to support China’s economic growth; at the same time, they have become one of the driving forces for a series of important economic and social reforms. These markets have undergone three periods of development over the past three decades. The first period was from 1978 to 1992, when China initiated full-scale economic reform. In response to the growing need to finance Chinese enterprises as they incorporated, capital markets began to emerge. The second period was from 1993 to 1998, whenChina consolidated the regulation and supervision of the capital markets by establishing the China Securities Regulatory Commission (CSRC). The third period is from 1999 to the present, during which the promulgation of the Securities Law defined the legal framework for regulating China’s capital markets.