Preface This paper briefly reviews the history of Chinese banking-system reform since the late 1970s and examines recent government reform efforts in detail, mainly focusing on the reform of state-owned commercial banks, which are handling more than half of the deposits and loans administered by banks in China. It also analyzes the current condition of major commercial banks using a simple international comparison and considers issues and challenges presented by further reforms to increase financial stability and provide for the sustainable economic development of China The author is an International Visiting Fellow at the raNd Corporations Center for Asia Pacific Policy, seconded by the Bank of Japan. She benefited from profound and construc tive reviews of earlier drafts by Pieter Bottelier, Senior Adjunct Professor of China Studies at Johns Hopkins University; Charles Wolf, Jr, Senior Economic Adviser and Corporate Fellow in International Economics at the RAND Corporation; and William H. Overholt, Director of the Center for Asia Pacific Policy. She is very grateful for their assistance She also appreciates the many fruitful discussions she has had regarding China during her study visit with colleagues at the RAND Corporation and the Bank of Japan and with Chinese government officials and scholars. However, the views expressed in this paper are her own and do not necessarily reflect the views of these institutionsiii Preface This paper briefly reviews the history of Chinese banking-system reform since the late 1970s and examines recent government reform efforts in detail, mainly focusing on the reform of state-owned commercial banks, which are handling more than half of the deposits and loans administered by banks in China. It also analyzes the current condition of major commercial banks using a simple international comparison and considers issues and challenges presented by further reforms to increase financial stability and provide for the sustainable economic development of China. The author is an International Visiting Fellow at the RAND Corporation’s Center for Asia Pacific Policy, seconded by the Bank of Japan. She benefited from profound and construc￾tive reviews of earlier drafts by Pieter Bottelier, Senior Adjunct Professor of China Studies at Johns Hopkins University; Charles Wolf, Jr., Senior Economic Adviser and Corporate Fellow in International Economics at the RAND Corporation; and William H. Overholt, Director of the Center for Asia Pacific Policy. She is very grateful for their assistance. She also appreciates the many fruitful discussions she has had regarding China during her study visit with colleagues at the RAND Corporation and the Bank of Japan and with Chinese government officials and scholars. However, the views expressed in this paper are her own and do not necessarily reflect the views of these institutions