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Emancipation of Mind Boosts China's Banking
A look into China's financial reform and capital market from a world perspective tells a major revamp of conception is being carried out in the country's banking and wide impacts are being felt as is shown by worldwide attention aroused. Illustrative is a special article "China's New Concepts" released by Asia Money known to the world for its authoritative influence found. With a wide coverage over pervading changes in China's economic financial work and thoughts among Chinese economic and financial ranking personnel as of the People's Bank of China, it says that brand-new ideas have penetrated into China's policy-making echelon of banking. And that chief leading personnel of state-run banks, state-run enterprise CEOs and supervisory strata of capital stock markets begin openly talking about the country's sensitive topics long shunned and have even been all out trying to find new ways out.
When talking about irregular dead loans Assistant Governor Li Ruogu with the People's Bank of China said: "The biggest challenge facing us is to put a stop to all new uncollectible accounts. A well self-regulatory system must be formulated, a proper amount of capital reserve is needed and there is also the possibility for long-term T-bonds to go public." Speaking about his views from a historical angle and world context he said, "We must do away with macro policing in our banking as we have long used and instead of an overall direct regulatory role by central policies monetary measures should be used in the main. It goes without saying we can learn much from US's banking as of its Central Bank. But instead of simple copying in their entirety their beneficial aspects must be assimilated. The responsibility delegated to us in China is what we have taken over must be a greater role to be brought into full play. This is to say under the US Federal Reserve, as contrasting our central People's Bank, no local branches are included and no hard money but currency issued."
The Asia Money article further says that intense competitions will be witnessed between various trades in China and to these people must have been alerted at an earlier date, especially the country's banks before China's WTO entry. Governor of the Construction Bank of China Wang Xuebing is one holding this view. He said that "as a part of the effort to reciprocate China's WTO accession and guarantee not to become a loser on high waves of world capital market China must speed up and deepen its reform of banking. As for my part, my job is to turn challenges into opportunities before completing fit-up exercise."
A clearheaded financier, Wang knows fully well the way foreign financiers are eyeing on their peers in China. As things were in the past, banks in China had been regarded as a destabilizing factor. So "in the eyes of many people, after China's WTO entry, state-run banks like ours would be beaten black and blue. But that's a mistaken view now no matter whichever or whoever should win out or be made a loser," he said. "And through contest there will certainly be given rise to a win-win situation between Chinese banks and their foreign counterparts as both are solidly entrenched and will certainly hold their ground."
The Asia Money article also holds that Chinese bankers are proving their worth and as financiers begin to know their line and such problems as of the structure and strategy of banking as well as the capability of management, credit appraisal, regulations governing lending of loans and the like. Pointing to these is a landmark change that has been made by ranking financiers in their financial thought. They have got themselves aware that the days with saviors as of the state and government to back them up in their banking operations have already been made a thing of the past. Governor Shang Fulin with the Agriculture Bank of China said: "it is by no means easy to find a creditable opportunity to lease a loan. The difficulty facing us lies in a demanding cultural atmosphere to be nurtured in which equal opportunities should be available for all contesting parts to achieve economic gains. Everyone must know that as things are entirely different now from past there is no more a large protective umbrella to shield us."
Foreign financiers must also be on the lookout for a changed capital market in China. UBS General Manager Warbury Bennett said a good phenomenon being seen at present in China is that the country's banking has already been placed on an elevated level of transparency and creditability. When talking about Chinese enterprises entering into world capital market Ms Huang Jiwen as representative of Arthur Anderson in China spoke out that "though the Chinese state-run enterprises are regarded as late comers on the international capital market yet they have got themselves speedily improved to know their own line. It goes without saying this is of vital importance to all CEOs of state-run enterprises in China. This is because market competition is not only a fight for a market share of capital but also a battle to combat for technology and elite."
There lies naturally another challenge to China's development of banking though few can tell whether can new things be transmitted from the decision-making echelon down to front-line workers. But Governor Wang Xuebing of the Construction Bank of China gave his words that "we can predict new competitions ahead of us and we will get our forces ready to fight it out."
When accepting his present post as chief advisor of China Securities Regulatory Commission two years ago Liang Dingbang got his yearend pay merely at RMB 1 yuan. What motivated him first and foremost were new challenges raised by his post. Practically speaking, by his work of recruitment of working personnel as for his foreign peers up till now there is still the thorny problem of a rational pay for his workers. When put on an international scale, people's pay in Chinese banks should be on a medium level as this is far from being on a standard pay scale when speaking about Chinese financial institutions with a great demand of high-level elites not to say on a world scale. This is especially so when facing a great flow of personnel between financial institutions locked in a fight for elites. In the words of an authoritative person in charge of recruitment of working personnel, "a 55 percent of budget or about is generally used by top-level bankers as pay for their elites working on the frontlines. But "for our part this is put merely at around 22 percent, raising great difficulties for us to recruit personnel needed," he said.
Can these new thoughts of China's ranking personnel and financiers devoted to developing China's banking be put in place and passed from top down to every operator and grassroots units in the whole trade of banking? This must be verified by time, without doubt. As are shown by the present state of things in China, there still exist at least the problem of institutional structure hampering China's development. Typical is such a problem put by a Chinese newsman to Liang Dingban: "What's the nut you have met and have to tackle with as the hardest to crack since you have been made chief advisor to China Securities Regulatory Commission?" The answer he gives is: "Too many problems have been raised from news media - the biggest challenge I have met and I'll have to deal with!" for a sweeping "emancipation of mind" drive now unfolding full steam backing up the advance of China's banking.
--- By People's Daily Online
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