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Financial Bodies to Go Public
China will turn its State-owned financial institutions into joint stock organizations in a bid to update the country's financial industry, according to a central bank researcher.
The key change will be to turn State banks, securities companies and insurance companies into shareholding bodies, said Pan Shuojian, vice-director of the central People's Bank of China's research bureau.
The introduction of shareholders will not only replenish State-owned financial enterprises' capital funds, but also establish a more efficient supervisory system, said Pan.
"The central bank, the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission will help financial enterprises list on the stock market," he said.
Listing of these enterprises will help China's securities market achieve better and sustainable development, he said.
Going public has become an international practice for financial institutions, said Jin Ying, deputy secretary-general of the CSRC at a recent seminar.
In regard to the State-owned commercial banks, Pan said reform should be launched immediately after State banks transferred non-performing assets to asset management companies. He also said banks should increase their assets by issuing financial bonds.
"If this happens, we can turn some State-owned commercial banks into joint stock ones with the State holding the majority of shares," he said.
China has four State-owned commercial banks, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank.
China's insurance industry is also busy preparing for structural reform.
The People's Insurance Company of China and the China Life Insurance Company have already launched feasibility studies about reform, while the China Reinsurance Company has submitted a reform plan to the State Council, according to officials with the companies.
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