Impact Of Banking System Reform On The Credit Resources Allocation In Shanghai

China’s financial system is dominated by bank credit and banking system occupiesan important position in China’s modern economic development. Commercial bankcredit resources have always been the major resource in production and operation ofenterprises. In order to promote the healthy development of China’s economy andsociety constantly, optimizing the allocation of resources has been the basic protection.Now our country is in the critical period of economic transformation, and the economicresources are very scarce. There are various structural defects of the existing financialsystem. The Banking’s compositions inside and outside are imperfect, and creditresources allocation is in the phenomenon of inadequate lending and over-borrowing.Non-state-owned enterprises cannot enjoy the same treatment in the credit marketcompared with state-owned ones, even suffered the credit discrimination. These factorscause the inefficient use of credit resources and hinder the development of enterprises.In this context, the government has been entrusted with the task of promoting the creditmarket, and has started a new round of banking system reform in late2003.This paper uses financial data of above-scale enterprises in Shanghai during theperiod2000-2012based on the changes in the credit market institutional environment. Itinvestigates the changes of credit allocation efficiency before and after the bankingsystem reform in China. In this paper, it proposes the hypotheses by the specificinitiatives for banking reform analysis after summarizing the theoretical factors thatinfluence the credit allocation. In the empirical study, it measures the differences inaccess to credit resources and changes in corporate through the growth rate of short-term loans, long-term loans and total loans. The study found that ownership is veryimportant to access to credit resources. They prefer to relational lending when banksconduct credit operations. But compared to the previous banking reform, this role ofpolitical relations in the credit markets appeared a degree of weakening. With the creditmarket’s gradual deepening configuration, the access to information has become moretransparent and smooth. The Banking has been gradually eased the conditions thatlending to non-state-owned enterprises, and put more emphasis on integrated corporateborrowing capacity. The study also found that our credit market was impacted by the alarge number of foreign invasion into our banking system. Because this time is the earlystages of development for the foreign banks in our country, its credit behavior will also prefer to relational lending, namely, this access to credit resources of foreign-fundedenterprises have a significant role in promotion, and thus will affect the pattern of creditmarket in China.