Banking Reform in China and Bulgaria in the Late 1980s: A Comparative Analysis
Banking Reform in China and Bulgaria in the Late 1980s: A Comparative Analysis

Summary/Abstract: Both China and Bulgaria carried out banking reforms in the 1980s. The Chinese reform was pushed from the inside and by the people and no explicit goals were set for the reform at first, including the goal of establishing a two-tier banking system. This fact made the Chinese reforms in different fields more time-consuming, but also more coordinated because the economic growth that resulted from the reform itself gave more resources to the decision-makers to solve the problems at hand. The Bulgarian reform was, to a large extent, the result of outside factors and was initiated by politicians. It was designed with more deliberation and was part of a program packet that included banking and industrial enterprises reforms as a whole. But Bulgaria did not have enough time to implement the reform plan before the political upheaval of 1989. Although China has got a comparative success in its banking reform, Bulgaria also had some important advantages. We cannot speculate whether the Bulgarian method of reform or the Chinese one was more effective.

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