Barth helps upgrade China's banking system

James R. Barth, the Lowder Eminent Scholar in Finance at Auburn University, has completed a project aimed at eventually bringing China's banking system into the global financial market.

Barth was the international team leader of an Asian Development Bank project that provided technical assistance to the Peoples' Bank of China. The result of the year-long project was the adoption of new banking laws by the Chinese that will improve the bank's legal and regulatory environment for the banking industry.

"China is the hottest topic in global business and policy circles today," says Barth, whose project team was made up of legal and regulatory experts from Beijing, Hong Kong, London, Shanghai and Washington, D.C.

With the assistance of Barth and his team, China amended its commercial banking law and enacted a new law establishing a separate bank supervisory authority.

"China committed to opening up its entire financial services industry to foreign competition by December 2006," said Barth, who made several trips to Bejing. "This timetable alone is exerting tremendous pressure to ensure that China continues to put its financial house in order."

The new laws, says Barth, will strengthen the legal and regulatory framework for the Chinese banking system and better prepare the industry for China's World Trade Organization commitments.

Barth's work on the banking reform in China was supported by two AU Chinese graduate students, Chuanlan Liu and Sijia Zhang.