The theory of “coordinated promotion” of financial reform in China as logical, but notional construct

Abstract. In February and April 2012, analysts of the Survey and Statistics Department of the People's Bank of China (CBR) Sheng Songcheng and Liu Xi proposed the concept of “coordinated promotion” of financial reform in China. This concept was one of the textually formulated manifestations of the expert consensus on the need to liberalize the fi-nancial system of the People's Republic of China. This consensus was clearly formed by the end of 2011 and was associated with the awareness of the country's expert community of the fundamen-tal systemic exhaustion of the potential of the in-vestment-cost model of economic growth imple-mented in China for a quarter of a century. The proposed concept was based on the idea of gradu-al, but simultaneous deregulation of the credit rate, the exchange rate on the domestic market and the exchange rate on the capital account. This concept, which is very logical and convincing theoretically, turned out to be a speculative construction in practice, since it did not offer real tools to over-come the soft budget constraint in the economy of modern China.

Keywords: China's economy, structural economic reforms, financial liberalization, soft budget constraint, hard budget constraint.

For citation: Karpov M.V. The theory of “coordinated promotion” of financial reform in China as logical, but notional construct. Modern Oriental Studies. 2022; 4 (4). P. (In Russ.) https://doi.org/10.24412/2686-9675-4-2022-68-73