Experiences from many countries (including China’s own experience) show that protection tend to create problems such as laziness, soft financial constraint, rent-seeking, and etc., damage the competitiveness and the industry’s development, and the market and institutions end up becoming unhealthy and instable. One example is what happened before and after the Asian financial crisis.
Nowadays, many Chinese financial institutions have gone global and adapted to international competition. Their risk management, pricing and anti-money-laundering have had gone through substantive changes. Today, five Chinese financial institutions have become global systemically important financial institutions and operate soundly on a commercial basis with adequate capital.