The Chinese financial system's evolution in recent years has been extraordinary. I have observed its transformation as a member of the International Advisory Council of the China Banking Regulatory Commission (CBRC).
Back in 2002, all of China's major banks were awash in nonperforming loans (NPLs), which in some cases amounted to more than 10 percent of the total balance sheet. None of the major banks met even the Basel 1 standards for capital adequacy. Few financiers in London or New York could have named any bank other than Bank of China, which was often wrongly thought to be the central bank.
And to suggest that the United States Federal Reserve, or the United Kingdom's Financial Services Authority, might have anything to learn from China's financial authorities would have been thought absurd.