Thus, prudential norms and supervisory strengthening were introduced early in the reform cycle, followed by interest-rate deregulation and a gradual lowering of statutory pre-emptions. The more complex aspects of legal and accounting measures were ushered in subsequently when the basic tenets of the reforms were already in place. 5. The public sector banks continue to be a dominant part of the banking system.
In response to the rapidly changing situation, the Chinese government decided to focus on making substantial progress in shifting the development pattern, and make sure that progress in this front is in line with the objective of supporting sound and rapid economic development, so that the two facilitate and reinforce each other.