In the recent years, the Chinese economic growth has been increasingly hinged upon the strengths of its banking system. While the major banks of the US and Europe are dependent on massive bailouts to survive, Chinese banks have remained strong under the recessionary conditions. The main factor behind their healthy condition is the unique ability of Chinese banks to manage risk in a prudent manner. While China continued to reform its banking system, it did not copy western countries in their pursuit of the high risk assets. Control of risk appetite helped Chinese banks to remain untouched by the subprime crisis.