Former CDB chairman publishes new book
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E-mail China.org.cn, November 8, 2013
Foreword
Mr. Chen Yuan's insightful new book, Aligning State and Market, is a compelling demonstration of how these two powerful economic forces can be effectively bridged by the successful application of development finance. It is well worth reading for anyone seeking an intelligent and thought-provoking perspective on these two forces at play in a market economy.
Development finance in China has its roots in policy-based lending. China Development Bank, established together with other policy banks in 1994 as an essential component of the country's financial system, contributed enormously to economic growth and progress in the financial sector, and has been a bold pioneer in the field of development finance. In a sense, the history of CDB's development and reform is a reflection of the ongoing efforts made by China's financial system in the context of building a socialist market economy. The approach that CDB has chosen is challenging, but wise; by drawing on global best practices finetuned to the Chinese context, CDB has emerged as a financial enabler of economic development and a complementary force in China's broader financial landscape and reforms.
CDB's experience shows that finance, the core of any modern economy, is rooted in and therefore must primarily serve the fundamental needs of the real economy. The financial sector and the real economy need to work in tandem to develop extensive synergies. As the global economy struggles along an uneasy path to recovery, growth in China faces downward pressure. To seek growth while maintaining stability, we need to have a robust real economy backed by a more effective financial system. Moving forward, CDB will continue to serve as a medium- to long-term financing provider as China transforms its growth model, achieves widespread prosperity for its wider population, and promotes a global presence for its enterprise.
The author, Chen Yuan, has been both a witness and contributor to monumental reforms in the Chinese financial sector. His extensive experience in the financial sector includes serving ten years as a deputy governor at the People's Bank of China. Since taking the reins at CDB in 1998, Chen has gained valuable insight into and become a true champion of development finance. In Aligning State and Market, Chen offers a systematic and comprehensive review of development finance in China. It is a thorough, first-hand historical account, and contains penetrating analysis and critical reflection. This book is refreshingly unique in its seamless combination of economic theory and personal narrative; it is China's first such articulation of the theory and practice of development finance backed by a dedicated practitioner. I believe that this book will inspire many to reflect on the course of China's financial sector reform and development, and offer the necessary wisdom to promote further openness and soundness for years to come.
Zhou Xiaochuan, Governor, People's Bank of China, Beijing
July 5, 2012
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