Chapter 2

Turning a Zombie Bank into a Global Bank

Chinese banks can be operated as soundly as American banks. China Development Bank is aiming to become a sound top-ranking international bank.

Chen Yuan, quoted in Li Luyang, “Impressions of Chen Yuan,” 2000

Chen Yuan, vice governor of the People’s Bank of China (PBOC), was in his room at the tony Carlyle Hotel on New York’s Upper East Side. Faxes were coming in from banks of the likes of Goldman Sachs and Morgan Stanley, all wanting to offer their services in helping Chen to invest China’s foreign exchange reserves.1

It was the mid-1990s, and Chen was the international face of Chinese finance. Fluent in English and a regular at meetings of the International Monetary Fund (IMF) and World Bank ...

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