financial reforms slowed down during 1988-1991 to control inflation, during which considerable (government-run) consolidation took place. For example, many TiCs were merged and were increasingly regulated by the PbOc In 1992, the famous"Southern Tour"by then Chinese leader Deng Xiaoping marked the beginning of another economic boom. In the financial system, this period witnessed a sharp increase in foreign direct investment(FDI), a deregulation of the banking sector characterized by the emergence of many new state/local government owned commercial bankS, and the re-emergence of Shanghai as the financial center of China Reform in the insurance industry kicked off the process within the financial system, with the entrance of four foreign insurance companies(branches)in Shanghai in 1992, in 1995, the first joint venture investment bank was formed between Morgan Stanley and PCBC; in 1997, nine foreign banks were allowed to enter the RMB markets and operations in the Pudong Special Zone in Shanghai. In 1994, three policy banks" were established to take over"policy"related lending in underdeveloped areas, export and import, and rural areas, while the four largest state-owned banks further developed into regular commercial banks, with profit maximization becoming an increasingly more important goal. Along with the growth of banks and financial intermediaries, interbank lending(1994 )and bond(1997)markets were established and the bank debit/credit cards market expanded rapidly. During the same period, the central bank (PBOC) increasingly used interest rates and reserves to manage the liquidity of the banking sector For example, the PbOC sets lower and upper bounds on deposits and loans, while commercial banks can decide the actual rates within the bounds The interbank lending rates were converted toward a uniform system in 1996 The most significant event for China' s financial system in the 1990s was the inception and growth of Chinas stock market. Two domestic stock exchanges, the Shanghai Stock Exchange (SHSE) and the Shenzhen Stock Exchange (SZsE), were established in 1990, and have experienced remarkable growth since then. However, the legal framework and institutions that support the stock market lag the growth of the exchanges. On a trial basis, Chinas first bankruptcy law was passed in 1986(governing SOEs), but the formal Company Law was not effective until the end of 1999 This version of the Company Law governs all corporations with limited liabilities, publicly listed and traded companies, and branches or divisions of foreign companies, as well as their organization structure, securities issuance and trading, accounting, bankruptcy, mergers and acquisitions(for China Pacific Insurance Company is the oldest insurance company in China that is currently operating. Formerly known by its current name in 1943, its insurance business was revived in 19868 financial reforms slowed down during 1988-1991 to control inflation, during which considerable (government-run) consolidation took place. For example, many TICs were merged and were increasingly regulated by the PBOC. In 1992, the famous “Southern Tour” by then Chinese leader Deng Xiaoping marked the beginning of another economic boom. In the financial system, this period witnessed a sharp increase in foreign direct investment (FDI), a deregulation of the banking sector characterized by the emergence of many new state/local government owned commercial banks, and the re-emergence of Shanghai as the financial center of China. Reform in the insurance industry kicked off the process within the financial system, with the entrance of four foreign insurance companies (branches) in Shanghai in 1992;4 in 1995, the first joint venture investment bank was formed between Morgan Stanley and PCBC; in 1997, nine foreign banks were allowed to enter the RMB markets and operations in the Pudong Special Zone in Shanghai. In 1994, three “policy banks” were established to take over “policy” related lending in underdeveloped areas, export and import, and rural areas, while the four largest state-owned banks further developed into regular commercial banks, with profit maximization becoming an increasingly more important goal. Along with the growth of banks and financial intermediaries, interbank lending (1994) and bond (1997) markets were established, and the bank debit/credit cards market expanded rapidly. During the same period, the central bank (PBOC) increasingly used interest rates and reserves to manage the liquidity of the banking sector. For example, the PBOC sets lower and upper bounds on deposits and loans, while commercial banks can decide the actual rates within the bounds. The interbank lending rates were converted toward a uniform system in 1996. The most significant event for China’s financial system in the 1990s was the inception and growth of China’s stock market. Two domestic stock exchanges, the Shanghai Stock Exchange (SHSE) and the Shenzhen Stock Exchange (SZSE), were established in 1990, and have experienced remarkable growth since then. However, the legal framework and institutions that support the stock market lag the growth of the exchanges. On a trial basis, China’s first bankruptcy law was passed in 1986 (governing SOEs), but the formal Company Law was not effective until the end of 1999. This version of the Company Law governs all corporations with limited liabilities, publicly listed and traded companies, and branches or divisions of foreign companies, as well as their organization structure, securities issuance and trading, accounting, bankruptcy, mergers and acquisitions (for 4 China Pacific Insurance Company is the oldest insurance company in China that is currently operating. Formerly known by its current name in 1943, its insurance business was revived in 1986