Development Banking in China : The Role of China Development Bank to China’s Economy

This paper discusses the history and its fundamental role of China Develop-ment Bank (CDB) in China’s economic growth. Through literature study, theoretical and empirical methods, this paper constructs an economic model to capture the mechanisms of how CDB contributes to the economic growth in China, and an econometric model to estimate how commercial and policy loans of CDB’s contributions to GDP, and calculates out the specific contribution. CDB’s new loans contribute on average 3%-4% of the total Chinese GDP. With the development of China’s economy and its financial system, China Development Bank is finding its vital role in the context.