Abstract
China's Banking sector is known to harbor an enormous amount of bad debt, making China's financial system extremely fragile, and one of the most fundamental causes of this problem is SOEs' low efficiency.
After the 1997 Asian Financial Crisis, China has quickened its pace of SOE reform. After three years of campaign aiming to make most loss-making SOEs profitable, SOEs' profitability improved in 2000, indicating a limited success of the campaign. Along the way, stated-owned sector is shrinking, while the non-state sector is expanding rapidly.
Despite these development, though, China SOEs still face enormous challenges. This article seeks to present a broad review of issues facing SOE reform and several measures to tackle them.
