Reform and evolution of finance in China:evidence from China’s reform and opening-up in the past 40 years

Over the past 40 years since the launch of reform and openingup,China’s finance has undergone substantial and fundamental changes in terms of size,structure and pattern as well as function,competitiveness,and international influence.Therefore,an accurate and comprehensive understanding of the current situation of China’s finance and its history in the last four decades is a prerequisite for deepening the reform and opening-up of finance and a foundation for establishing a modern financial system in China.This paper reviews the historical evolution of China’s finance over the past 40 years,focussing on the volume and market share of different types of financial assets,financing tools and mechanisms,patterns in and functions of finance,the risk structure in the financial system,financial opening,and the financial regulation model.It further proposes that in the future,China should establish a modern financial system characterised by‘large-economy finance’.