The Price of Informality: How Informal Finance Schemes Defaulted in China, 1989–2015

Lin, L.; Yang, K.

The Price of Informality: How Informal Finance Schemes Defaulted in China, 1989–2015

Lin, L.; Yang, K.

Authors

L. Lin

Dr Keming Yang keming.yang@durham.ac.uk
Associate Professor

Abstract

The default of a large number of informal finance schemes in China has caused enormous financial losses, and therefore has potential social and political significance. Analysing 354 defaulted schemes from 1989 to 2015, this study defines how they differ from other types of informal finance. It also produces an ideal-type representation of the default process and concludes that the default results from greed, increasing financial pressure at the individual level and private enterprises’ restricted access to state bank loans at the institutional level. China’s financial system should be more flexible in order to prevent further financial losses through informal financial relations.

Citation

Lin, L., & Yang, K. (2017). The Price of Informality: How Informal Finance Schemes Defaulted in China, 1989–2015. China: An International Journal, 15(4), 111-135

Journal Article Type	Article
Acceptance Date	Jan 23, 2017
Online Publication Date	Nov 30, 2017
Publication Date	Nov 30, 2017
Deposit Date	Feb 14, 2017
Publicly Available Date	Jan 23, 2018
Journal	China: An International Journal
Print ISSN	0219-7472
Electronic ISSN	0219-8614
Publisher	Singapore University Press
Peer Reviewed	Peer Reviewed
Volume	15
Issue	4
Pages	111-135
Public URL	https://durham-repository.worktribe.com/output/1365539
Publisher URL	https://muse.jhu.edu/article/680686