Endnotes

^* Department of Economics, University of Bari – Via C. Rosalba 53- 70124 Bari (Italy).
E-mail address: g.ferri@dse.uniba.it
The author wishes to acknowledge the useful comments received from Stefano Chiarlone, Donato Masciandaro and other participants in two workshops (Bocconi University, March in Milan; Villa Mondragone International Economic Seminar, July in Rome) where early drafts of this paper were presented.

¹ ICBC is about one-quarter of the Chinese banking system’s total assets and those 15 billion dollars represent beyond 2% of ICBC’s assets and above 1% of PRC’s GDP. An analogous percentage on total assets applied to 45 billion dollars in support of Bank of China and China Construction Bank, amounting to 4% of GDP. Foreign currency reserves coming from the People’s Bank of China were used for the purpose against banks’ equity. See IMF (2004) for an evaluation of the December 2003 intervention and the associated reform steps.

² Some of the arguments presented in this Section were already developed in Ferri (2003).

³ Depending on the availability of data on Bankscope, we include in the group of the New Tigers 35 banks whose size differs greatly: Bank of Communications, China International Trust & Investment Corporation, China Merchants Bank, China Everbright Bank, China Minsheng Banking Corporation, Hua Xia Bank, Fujian Industrial Bank, Ping An Bank, Shenzhen RCCs, Bank International Ningbo, First Sino Bank, Qingdao International Bank, Business Development Bank, Chongqing Commercial Bank, Shandong International Trust & Investment Corporation, Guandong Development Bank, Shanghai Pudong Development Bank, Shenzhen Devlpmnt Bnk, Xiamen International Bank. To this Bank of Shanghai, Beijing CCB, Tianjin CCB, Shenzhen CB, Hangzhou CCB, Changsha CCB, Chengdu CCB, Jinan CCB, Nanchang CCB, Nanjing CCB, Ningbo CB, Wuhan UCB, Wuxi CCB, Xi'an CCB, Xiamen CCB, Zibo CCB. The last 16 of these 35 banks are City Commercial Banks (CCBs), the type of banks we will analyze later, while the other 19 are assorted across the other categories.

⁴ See, among others, Ferri (2003), Liu (2002).

⁵ We measure market shares here on the sum of the SOBs plus the New Tigers, thus focusing on commercial banks and excluding the postal system and policy banks.

⁶ By the same token, it has been observed that, in the experience of transition economies, more progress is achieved through the entry of new banks rather than through rehabilitating old SOBs (Claessens, 1998).

⁷ The only caution we used was to check that the growth of total assets for PRC’s banking system was reasonable. We should stress that rates of growth increase going out to 2010, as the faster growing New Tigers enlarge their market share, but even so the rate of growth by 2010 is 17.2% which does not appear patently unrealistic.

⁸ The survey was conducted during 2004 by the Research Institute of Finance at the Development Research Center of the State Council on behalf of the Asian Development Bank Institute, Tokyo

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