21 August 2019

The Big Picture: PRIVATE BANKS

Private investors will be allowed to enhance their stakes in certain rural banks and agricultural cooperatives in China, a top regulator said on Monday, also reiterating that the country will encourage private players to establish new banks.

At present, private capital owns about 42 percent of Chinese shareholding banks and 54 percent of urban commercial banks compared with 11 percent and 19 percent in 2002, respectively, said Yan Qingmin {閻慶民}, vice chairman of the China Banking Regulatory Commission (CBRC).

In some rural lenders and small and medium-sized financial institutions, private capital owns more than 88 percent of equity, the official said at a forum in Beijing.

The banking regulator will continue to encourage private capital to take part in financial reform while allowing private funds to set up financial leasing companies and private banks, Yan said.

The move is in line with reforms announced by the Communist Party central committee at the end of its recent third plenum.

The CBRC has submitted draft policy proposals on private banks to the State Council for review and approval, the Shanghai Securities News reported Monday, citing Chen Sheng {陳勝}, deputy director of the CBRC’s Banking Innovation Supervisory Division.

The banking regulator is likely to announce a deposit protection scheme in the first quarter of next year before launching concrete regulatory rules for private investors to set up their own banks, according to some observers.

Meanwhile, it may have to speed up the launch of new regulations to deal with any bankruptcies of commercial banks, combining the provisions related to liquidation procedures and creditors’ rights in the existing Bankruptcy Law and Commercial Bank Law.

Govt to streamline fixed-asset investment approvals

The central government is expected to gradually cut the range of fixed-asset investments requiring its direct approval by 60 percent, Xinhua reported Monday, citing Lian Weiliang, deputy director of the National Development and Reform Commission. Lian said that so far this year the commission has delegated approval rights for 44 items to lower level authorities and more approval powers would be decentralized in line with decisions made at the Communist Party plenum earlier this month. 

Guangzhou unveils blueprint for 10 key industries

The Guangzhou municipal government has announced development plans for 10 key industries that will be implemented until 2016, China News Service reported Monday. The city administration aims to increase the value of these industries by 1 trillion yuan (US$164.11 billion), and form a cluster of flagship companies in each of the industries. The industries are automobiles, fine chemicals, heavy machinery, information services, biology and healthcare, new materials, new energy and green technologies, convention and exhibition, financial and insurance, and logistics. 

– Contact HKEJ at [email protected]



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