Sequencing,resistance and forced innovation: a longer view of china's financial reforms

Gradualist in nature, China's economic reform has been criticized as being wrongly sequenced. Serious problems of inertia and delayed changes, particularly in the macroeconomic and financial spheres have built up since 1979. To rectify the situation, the Chinese government launched in 1994 major reform initiatives covering taxation, central and commercial banking, and the foreign exchange system. This paper looks at the historical background to these financial reforms from the perspective of sequencing and examines the factors behind their partial and uneven successes.