Dal 1995 il sistema bancario cinese vive una autentica rivoluzione, materializzata sia da un nuovo assetto legislativo che da un nuovo assetto organizzativo nei diversi ambiti e nei diversi settori.
La Banca popolare di Cina ha offerto dunque all'Associazione questi tre testi di studio che volentieri pubblichiamo.
The development and supervision of the banking sector
La Banca popolare di Cina (People's Bank of China) ha un ruolo centrale in questa riorganizzazione finanziaria e di conseguenza aumenta gli sforzi e gli studi per una discussione approfondita sul sistema bancario.
The development of financial institutions
With the stable performance and deepening reform in 1995, China' financial industry developed steadily in a drive towards business segregation, orderly management and diversified functions.
The Tremendous Strength of the State-owned Commercial Banks
Among the deposits and loans of all financial institutions, those of state-owned commercial banks accounted for 65 percent and 64 percent respectively, showing their tremendous strength. In the ranking by assets of banks in the world, the 4 state-owned commercial banks moved up to vatious extent. With the promulgation of the Commercial Banking Law of the People's Republic of China, the state-owned commercial banks improved their asset quality by strengthening management, aspecially by the adoption and promotion of asset/liability ratio management and risk management. Currently, the unified legal entity system and management and adjustement ability concentrated in the head offices of the state-owned commercial banks have been significantly improved. Pursuant to the basic principle of business segregation provided by the Commercial Banking Law of the People's Republic of China, 59 of the 89 trust and investment
company subsidiaries of Industrial and Commercial Bank of China and the People's Construction Bank of China wound up while the equities of the other subsidiaries are being sold. Meanwhile, several thousand of operational offices with insufficient business and long term losy-making were either merged or terminated.
The State Policy Banks in the Stage of Essential Operation
In 1995 the State Development Bank of China and the Export-Import Bank of China developed business comprehensively and became the major source of long-term financing for constructions and long-term policy credit to facilitate national key construction projects and the important channel of fund supply to support agricultural development, to assure procurement of grain and cotton and to promote the exports of large-sized machinery and electrical products. In 1995, policy loans granted by the 3 policy banks accounted for 12,7 percent of the aggregate loans of the financial industry, which satisfied the fund demands of key constructions and leading industries and significantly supported the adjustment of industrial structure. At present, an effective operational mechanism of financing and utilization of policy funds, internal management and business consignment system for the policy banks is established,
which basically reflects the principle of separating policy credit from commercial credit, refraining from competition with commercial banks, preserving self accountability and breaking even with small profits. It also represents the active exploration into the establishment and improvement of long-term financing, capital consolidation and interest subsidy on loans from state policy banks.
Further Development of Commercial Banking Institutions
New members of the banking industry included 2 commercial banks and 3 Urban Cooperative Banks already in operation. The commercial banks are China Minsheng Bank and Hainan Development Bank. The major function of the former is to serve the private sector and small and medium-sized enterprises while that of the later is to support the development and construction of Hainan special economic zone. The establishment of these 2 commercial banks increased the number of commercial banks uside from state-owned commercial banks to 12 with over 30 branches. Although the newly-established banks can bardly compete with state-owned commercial banks in the size of assets, number of branches and emplyees, they enjoy better performance in the growth of capital, assets and profits than the state commercial banks, showing strong operational vitality, tremendous growth momentum and high efficiency and constituting viable power in China's banking sector and the national economic development.
The initiation of Urban Cooperative Banks was an important content of China's financial reform in 1995. By the end of year, 16 Urban Cooperative Banks were in preparatory stage,, among which the Urban Cooperative Banks in Shanghai, Beijing and Shenzhen had already started operation. The Urban Cooperative Banks are the regional share-holding commercial banks established on the basis of Urban Credit Cooperatives with the equity subscription of urban enterprises, residents and local governments. Their major function is to provide financing to the local economic development with priority given to providing financial service to urban small and medium-sized enterprises. The Urban Cooperative Banks adopted primary legal entity and consolidated accounting system. The legal entity status of Urban Credit Cooperatives should be terminated after being taken over by the Urban Cooperative Banks as their branches.
The Development and Standardization of Non-Bank Financial Institutions
Non-bank financial institutions are a major component of China's financial system. The rectification and re-registration in 1995 showed that there were 511 non-bank financial institutions, among which were 332 trust and investment companies, 98 securities companies, 65 finance companies of business conglomerates and 16 financial leasing companies. A non-bank financial institutions system hearing Chinese characteristics, with a variety of institutions of diversified functions was basically formed.
Except for the insurance industry, trust and investment companies are the strongest category with long establishment among the non-bank financial institutions. By the end of 1995, the total assets of trust and investment companies reached RMB 458.56 billion yuan. In accordance with the requirement of business segregation and standardized management, the People's Republic of China strenthened market entry regulation in 1995. After the re-registration, 3 new trust and investments companies were approved to establish and some of the trust and investment companies were reorganized. The Industrial and Commercial Bank of China and the People's Construction Bank of China were divested of their trust and investment company subsidiaries. By the end of 1995, the number of trust and investment companies decreased to 332 from 393.
In 1995, 323 companies recommended by securities companies were listed and direct financing for these enterprises amounted to RMB 76,56 billion of yuan. The total trading volume in 1995 in Shanghai and Shaenzhen Securities Exchange reached RMB 6390,6 billion yuan with the total market value of RMB 93,2 billion yuan at the end of the year.
Financial leasing industry further developed. The Peaople’s Bank of China authorized 4 financial leasing companies to continue to operate and approved the preparatory schemes of 12 financial companies of business conglomerates of which 10 are already in operation. Currently, the assets of financial companies of business conglomerates amounted to RMB 68,07 billion yuan, with RMB 45,12 billion yuan of deposits and RMB 36,65 billion yuan of loan.
Insurance Industry in Rapid Development in the Reform Process
1995 witnessed significant progress made by China's insurance industry along with the promulgation of the Insurance Law of the People's Republic of China and the reform and development of the national economy. In 1995, the People's Bank of China approved the establishment of Dazhong Insurance Company and branches of Pingan Insurance Company in Wuhan, Changchun and Chongqing respectively. In addition, 2 foreign insurance institutions - AIA and AIU - were granted branch licenses in Guangzhou. Up to now, on China's insurance market, there are 23 independent legal entities of which 3 are comprehensive insurance companies, 2 regional property insurance companies, 1 captive insurance company for farming sector and 17 life insurance companies. Besides, there are 6 foreign insurance company branches. Premium income increased from RMB 49,8 billion yuan in 1994 to RMB 61,57 billion yuan in 1995 with a rise of 23,6 percent of which
life insurance premium increased to RMB 19,42 billion yuan from RMB 16,2 billion yuan in 1994 and the property insurance premium increased to RMB 42,11 billion yuan from RMB 33,6 billion yuan in 1994. The total insurance coverage increased from RMB 11173,5 billion yuan of 1994 to RMB 13067,9 billion yuan of 1995, representing 2,5 percent growth. Meanwhile, the insurance service further expanded. Tha categories of insurance increased to over 600 from 500 in 1994. 900 thousand enterprises were insured against enterprise property risk, 180 million residents were insured against house-hold property risk and 380 million people were life insurance policy holders. The indemnities of property insurance and life insurance amounted to RMB 24,2 billion yuan and RMB 6,47 billion yuan respectively. Insurance is playing all the more important role in the safe and sound operation of enterprises, stable livelihood of the masses and market development.
Insurance system reform also made significant progress in 1995. According to the principle to separate life from non-life insurance business, the People's Insurance Company of China was transformed into The People's Insurance (Group) Company with 3 subsidiaries specializing in property insurance, life insurance and reinsurance respectively. Pursuant to the principle to separate insurance from banking business, China Pacific Insurance Company became a share-holding commercial insurance company independent of the Bank of Communications, the former parent company. In accordance with the convergence of insurance assets, Pinguan Insurance Company terminated the legal entity status of its 6 subsidiaries in Beijing and trasformed them into branches. The branching structure of insurance companies were standardized with the names of the insurance companies identified and the concepts of national and regional insurance companies defined.
The place of incorporation establishment and business scale of regional insurance companies were clearly provided. Furthermore, insurance companies reformed their marketing mechanism of life insurance policies. As a pilot program, insurance agents were employed to market life insurance policies. The practice to stress institutions over individuals and wide use of administration means instead of marketing were essentially corrected. Insurance-consciousness of the public was effectively enhanced.
Financial reform and development will focus on the following aspects:
Further Improvement of the Function of the Banking System
State-owned commercial banks should promote the reform of internal management, and gradually realize the trasformation of development and management approach from extensive expansion to intensive improvement of efficiency. Branches and operational offices that suffer from prolonged loss and insufficient business and have no development potential should be properlu adjusted. The Agricultural Bank of China and Bank of China should divest of the affiliated trust and investment companies in due corse. State policy banks should continue to build on and improve the mechanism for long-term financing, capital consolidation and interest subsidy. The consignment system in operation should be further promoted and improved. Urban Cooperative Banks should be initiated in 35 large and medium-sized cities assuming a large number of Urban Credit Cooperatives as their branches. Meanwhile, the People's Bank of China will Strengthen its supervision on other Urban Credit Cooperatives.
Rural financial system reform, of which it is expected to take 2 years to build the framework, consists of 3 components - rural cooperative finance, commercial finance and policy finance. The main body of policy finance is the Agricultural Development Bank of China, that should further its reform to improve the consignment system and to support the development and improvement of agricultural infrastructure by strengthening the close-end management of procurement funds for agricultural and sideline products. The reform of rural cooperative finance will be undertaken from the grassroots level upward. First, Rural Credit Cooperatives at the township level should be reformed and standardized in accordance with the principle of cooperative mechanism. The initiation of united Rural Credit Cooperative at the county levels should be accelerated. Based on the achievement of this step, the authority of financial administration of
Rural Credit Cooperatives should gradually be transferred from the Agricultural Bank of
China to the People's Bank of China. However, in the transition period, the Agricultural Bank of China should remain as a entrusted agency of the People's Bank of China in the guidance and administration of Rural Credit Cooperatives. Finally, a self-discipline organization of the rural cooperative financing sector to shoulder the responsibility of business guidance and administration may be brought onto the agenda. Reform of the rural commercial finance are two promgs - the Agricultural Bank of China and the future Rural Cooperative Banks. In the transformation into a commercial bank, the focus of the Agricultural Bank of China, should be placed on the business at township and country level. Operational offices with insufficient business or long-term loss-making will be closed or merged. The unified legal entity status of the head office and internal fund allotment ability should be enhanced. By nature, Rural Cooperative Banks are share-holding commercial banks as the Urban Cooperative Banks.
They will be initiated on a trial basis in a limited number of developed counties/towns with the rural and urban integrated economy pursuant to the market entry provisions of the Commercial Banking Law of the People's Republic of China.
Orderly Development of Non-Bank Financial Institutions
People's Bank of China will further enhance its administration of the market structure and licensing procedure of non-bank financial institutions. The size and development speed of non-bank financial institutions will be determined in the consideration of long-term capital needs for economic construction and the sophistication of capital markets. In the examination of the qualification of share-holders of non-bank financial institutions, large enterprises in conformity with the national industrial policy will enjoy priority to participating proprietorship so as to reflect the basic demand of the state industrial policy on the development of the financial industry. The securities trading centers, securities registrar and clearing houses, fiscal securities institutions and investment fund managment companies should be rectified and standardized. The scale of business of non-bank financial institutions should be clearly defined
and violation of business scale strictly prohibited.
Pursuant to the basic principle of business separation, with the realization of separation of banking, trust, securities and insurance, identification of various non-bank financial institutions in the marketplace will be formed. It is expected that the number of trust and investment compnies will be further reduced and that of other non-bank financial institutions will not increase enormously. Only by reasonable determination of business scale and orientation of development for different kinds of institutions in line with Chinese reality and international practises and establishment of proper merger and bankruptcy mechanism, could the problem of universal operation be solved, and an operation environment be created for fair competition and orderly development.
Vital Development of Insurance Industry
China's huge insurance market has been formed and extended with the progress of economic reform and development. It is expected that insurance industry will mantain its strong growth momentum. Premium income will wxceed RMB 80 billion yuan covering more than RMB 17 trillion yuan with more than 700 categories of insurance. Insurance enjoys the greatest potential in the financial industry.
To address the existing problems of insufficient market players and dearth in competition mechanism, People's Bank of China will license some new insurance institutions and insurance branches. With respect to insurance system reform, first of all, the principle to separate life from non-life insurance provided in the Insurance Law of the People's Republic of China should be adhered to. Programs on the separation of life and non-life Insurance of Pacific Insurance Company and Pingan Insurance Company should be worked out while the organization structure of the People's Insurance (Group) Company to assure the business separation should be further improved. Secondly, pursuant to general requirement for rural financial system reform, the general program of rural insurance system reform should be studied and drafted and national agricultural insurance company initiated. In agriculture-dominant provinces, rural insurance cooperatives should gradually
be established and captive insurance of the farming sector br properly encouraged. Thirdly, national reinsurance company should be established to carry out the function of central reinsurance company to overcome the difficulties of reinsurance in the market and adjust the insurance market with economic instruments. Fouthly, the consignment system should be further improved and administration on consignors should be strengthened. Finally, trial projects should be carried out on insurance brokers and notarized public appraisers to improve the intermediate market in a gadual manner. With regard to the improvement of actual system, the first mortality table will be released and will come into effect. Qualification examination system of actuaries will also be initiated. These will prove significant in promoting the insurance industry to operate in a scientific manner. It is believed that with the deepening of the reform, China's insurance industry will further develop with vitality.
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