China Needs to Change Way It Finances Economy, Think Tank Says

China Needs to Change Way It Finances Economy, Think Tank Says
A clerk counts Chinese 100 yuan banknotes at a branch of a foreign bank in Beijing on Jan. 4, 2016. Kim Kyung-Hoon/Reuters
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HANGZHOU, China—China needs to develop a better system for financing small businesses that drive innovation in the economy but currently struggle to access the funds they need for growth, a leading Chinese think-tank said in a report published on Sept. 22.

China’s economic development over the past 40 years has taken place through a financial system that has high government intervention and is “absolutely dominated by banks,” the China Finance 40 Forum said in an annual report.