At the end of August 2002, 18 financial institutions from Zhejiang
Province and over 40 overseas banks attended an international
financial cooperation meeting, held in Hangzhou, capital of
Zhejiang. It is the first time that China's regional financial
institutions have sought overseas cooperation on such a large
scale.
Those overseas banks present at the meeting included the Shanghai
Branch of Banque Nationale de Paris, Hong Kong and Shanghai Banking
Corporation, Banca Nazional del Lavoro, and Swiss Bank Corp..
Financial expert Ying Yixun said it's Zhejiang's overall economic
environment that attracts so many overseas banks. As one of China's
most quickly developing provinces, Zhejiang has become a hotspot of
foreign investment. Meanwhile, private enterprises, which account
for 90 percent of Zhejiang's overall economic volume, are thirsty
for financial support to augment their development.
Statistics till the end of June 2002 show that Zhejiang has become
the fifth largest province, in financial terms, with deposits
exceeding the 1,000 billion yuan (US$120.77 billion) mark, leaving
the region behind only Guangdong, Beijing, Jiangsu and Shanghai.
Its rate of bad loans is only 8.9 percent. However, many
disadvantages such as small company size, low-levels of managerial
expertise, and weak competitive aptitude are hampering many of
Zhejiang's financial institutions.
Wang Zhangchun, representative of the Wenzhou Commercial Bank which
has a registered capital of over 290 million yuan (US$35.02
million), said that the bank has established many new operations
and is experiencing a rapid phase of growth. However, such rapid
expansion in operations brings associated problems such as a lack
of fund.
He
said the bank hopes to cooperate with foreign banks, in order to
raise capital reserves, introduce advanced management techniques,
and strengthen their overall competitive ability. They aim to
follow international practice and encourage joint-stock holdings in
commercial banks with the support of overseas or private
capital.
A
senior official from Zhejiang provincial government said that
inline with China's commitment to the WTO, Zhejiang wants to
broaden its cooperation with its overseas counterparts. He said,
overseas financial institutions can cooperate with them through the
buying of shares, the formation of joint-holdings, the merging or
establishing of branches, and assisting with employee training and
the creation of agents for financial services.
Deputy secretary-general of the State Economic and Trade Commission
(SETC) Gan Zhihe pointed out last month that the field that
attracts the most foreign investment into China will shift from the
industrial to the service sector. Currently, overseas investors
hold shares in both the Shanghai Bank and Nanjing Commercial
Bank.
An
official from the Hangzhou Branch of the Peoples' Bank of China
pointed out that according to the commitments made by China to
World Trade Organization, the opening-up of the financial sector is
well inline with the agreed schedule. He also added there is no
deadline for overseas banks to hold shares in China's financial
institutions.
(china.org.cn by Tang Fuchun, September 14, 2002)