The Path of Financial Modernization in China (Focusing on the Profitability Analysis of Modern Chinese Commercial Banks)

Author: Lan Ri Xu
Publisher:
Publish Date: 2005-09-01
Features: This book comprehensively, deeply, and from multiple perspectives examines the fundamental goal of banks—profitability—given their crucial role in economic development. It combines theory with real-world situations to truly unveil the mystery of commercial bank profitability. This not only fills the academic gap in connecting theory with historical facts but also provides references for the development of commercial banks in reality. Finance is the hub of the national economy, and banks are the veins of the economy. Compared to other industries, banking activities more vividly reflect the socio-economic conditions and characteristics. Therefore, exploring the relationship between banks and the socio-economy from the perspective of banking itself holds significant theoretical and practical importance. As early as the 1934 National Bank Annual, it was noted that "under the modern socio-economic organization, the banking industry is indeed a mirror of a nation's state. All changes and developments in the national economy are reflected in the banking industry, and any measures or policies implemented by the banking industry, in turn, affect the national economy." The relationship between banks and the socio-economy was true during the turbulent modern era and remains so in the highly developed economy of today. In the early 1990s, Comrade Deng Xiaoping, during his inspection tour of Shanghai Pudong, clearly stated that to revitalize Shanghai and expand it, it was essential to revitalize Pudong. To revitalize Pudong, it was necessary to first revitalize finance, and to revitalize finance, it was essential to revitalize banks. These words highlight the importance of banks in socio-economic development. This paper, therefore, examines the crucial role of banks in economic development and their fundamental goal—profitability—comprehensively, deeply, and from multiple perspectives, combining theory with real-world situations to truly unveil the mystery of commercial bank profitability. This not only fills the academic gap in connecting theory with historical facts but also provides references for the development of commercial banks in reality and contributes a small effort for Chinese commercial banks to secure a place in the global economic arena.