A new World Bank report on China’s economy says the country urgently needs to take measures to reform its financial system, The Financial Times reported. “Financial reform will only prove effective if it removes the distorted incentives and poor governance structures that have affected how financial resources are mobilized and allocated,” the bank said in the report, published Wednesday. “A fundamentally reconfigured role of the state in the financial system is essential.” According to the bank’s calculations, the Chinese government has effective control over almost 95% of bank assets, resulting in state-owned enterprises securing a disproportionate share of available credit at the expense of small and medium-sized enterprises.
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