BIZCHINA / Weekly Roundup
China Exim is banking on reform
(China Daily)
Updated: 2007-01-29 10:11
The reform of China's three policy banks was on top of the National
Financial Work Conference's agenda in Beijing last week.
Earlier, these banks had been designated to help State-sector companies
implement the central government's economic policies. It was a temporary
arrangement in the country's transition from direct government allocation
of funds during the planned era to regular loan financing in today's
market economy.
China Daily reporter Zhang Lu interviewed Li Ruogu, chairman and
president of Export-Import Bank of China (China Eximbank), to learn the
details of the bank's imminent reform and future business.
Q: The National Financial Work Conference has decided to reform the three
policy banks. As China Eximbank's top leader, how do you see that
happening?
A: The three policy banks have been around for 12 years. Now, all
government departments have agreed that it's time these banks readjust
their operations to suit the changing business environment, both at home
and abroad.
The three banks have to play an important role in the market economy. But
the path they take should suit their respective specialities.
Policy-based financial service is not likely to be phased out completely
at this stage because it still plays a vital role in bridging the gap
between urban and rural areas and in sheltering Chinese enterprises from
the risks of the global market.
Financing Chinese firms in their export and import operations will
continue to be part of China Eximbank's business, and, hence, be tied to
government policies because the country still needs this kind of service.
It's not uncommon for a country to have an export and import bank to help
its businesses.
In fact, there are about 80 export-import banks or similar institutions
in more than 70 countries. Even the United States has an export-import
bank, which is a key player in formulating its foreign policies.
But notwithstanding their policy-based roles, it's also important that
policy financial institutions function and grow as businesses. It's true
that China Eximbank is not in business to maximize its profits.
But that should not mean we don't care about the returns. And most
importantly, policy-based lending should not mean low-quality business.
We can learn from our overseas counterparts' practices how to make a
profit by separating the management of policy accounts from regular
accounts.
The other point that I'd like to make is that under no circumstances
should there be a competition for business among the leading policy
institutions.
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