中国银行业的改革和盈利能力毕业论文中英文资料对照外文翻译文献综述.docx

1、中国银行业的改革和盈利能力毕业论文中英文资料对照外文翻译文献综述中英文资料对照外文翻译文献综述Chinas Banking Reform and Profitability Erh-Cheng Hwa Yang Lei 1. Introduction The World Bank (1997) once claimed that Chinas financial sector was the soft-belly in the economy. Financial sector reform has long been argued as necessary to raise efficien

2、cy in the use of the capital and in rebalancing the economy toward consumption-based growth, without which the countrys growth sustainability is in jeopardy (see Lardy, 1998; Prasad, 2007).Indeed, not too long ago, Chinas state banks were deemed “technically insolvent” and their survival hinged sole

3、ly on the nations abundant liquidity.However, after the launching of banking reform, strong profitability has returned to state commercial banks recently. But it may be too early to declare a complete victory on banking reform as yet, since Chinese state banks have embarked on the path of reform not

4、 too long ago. In addition,their strong financial performance has ridden on the back of strong but unsustainable growth. As growth has begun to soften under the weight of a global recession in 2008, banks are expected to navigate in a more difficult economic terrain than hitherto. The aim of this pa

5、per is not to evaluate the effect of banking reform on bank performance, which is better tackled after the completion of a full credit cycle. Rather, our aim is to take stock of the progress in reforming Chinas state banks by reviewing the banking reformstrategy and analyzing their recent strong pos

6、t-reform financial performancewhich, however, cannot be entirely separated from reforms efforts undertaken thus far. This paper has three sections. In Section 2, we review the reform strategy of Chinas large state banks, which is the main thrust of Chinas banking reform, as well as its implementatio

7、n. The Section 3 analyzes 2007 financial performance focusing on the four largest state commercial banks that have floated shares in the market: Industrial Commercial Bank of China (ICBC),China Construction Bank (CCB), Bank of China (BOC), and Bank of Communications (BOCOM). The conspicuous exceptio

8、n is Agriculture Bank of China (ABC), which is still in the process of restructuring for market listing at an appropriate time later. Section 4 concludes with an assessment on bank performance.2. Bank Reform Strategy and Its Implementation2.1. Bank reform strategy Before reform, state banks were sol

9、ely owned by the State and served national economic policy goals.1 Since they were not wholly profit-making commercial entities, common commercial banking criteria for evaluating their financial performance do not apply strictly. Nevertheless, as soon as the country decided to embark upon the path o

10、f a socialist market economy in the October 1992 CCP Congress, commercialization of the state banks had become a foregone conclusion. The goal of banking reform is to turn state banks into commercial entities that are competitive in the marketplace and can provide efficient intermediation of the nat

11、ions saving. Given their dominance in financial intermediation, the banks play a crucial role in the efficient allocation of capital.2.1.1. Creating the enabling environment for banking reform The countrys market reform and opening program has greatly accelerated since 1992 when in October that year

12、 the 14th CCP Congress declared that the goal of reform and opening was to create a socialist market economy,which effectively ended the experimental nature of economic reform and opening program launched since the late 1970s. The firming up of market-oriented reforms has created an enabling environ

13、ment for a host of reforms central to the socialist market economy construct including foremost the banking reform. In early 1994, in response to the inflation threat, the government launched macroeconomic reform encompassing central banking,exchange rate management, and fiscal policy and taxation.

14、The macroeconomic reform permitted the central authorities to regain macroeconomic control lost to local authorities in the decade of the 1980s under the decentralization policy of “fang quan rang li”.2 While decentralization ushered a period of rapid growth, it also generated significant macroecono

15、mic instability.Indeed, the pursuit of macroeconomic reform significantly dampened macroeconomic cycles in the 1990s. Second, in the same year, the government created three policy banks State Development Bank, Agriculture Development Bank, China ExportImport Bank to relieve state commercial banks of

16、 their traditional policy mandates. Third, the government promulgated central banking and commercial banking laws in 1995 to provide the legal foundation for banking reform. Fourth, beginning from 1996 the government began to vigorously pursuit enterprise reform that paved the way for banking reform

17、, even this resulted in large and painful layoffs of redundant state workers. Pursuing enterprise reform ahead of banking reform was necessary considering that state-owned enterprises were the main clients of state banks and hence their main source of non-performing loans NPLs, which was at the same

18、 time the contingent liability to the government. Hence, unless the reform of stateowned enterprises takes hold, any reform effort of the state banks would be in vain. On the other hand, as soon as the state-owned enterprise reform was pressed forward, the banking reform could no longer be postponed

19、. This is because as state-owned enterprises were restructured, liquidated, merged, or bankrupted out of existence, the banks must start to recognize the hidden losses on their books. This, in turn, triggered the need to recapitalize the banks, as a large amount of non-performing loan was written-of

20、f. Fifth, the State Council in February 2002 decided to reform solely stateowned commercial banks into internationally competitive financial enterprises, transform them into state-controlled shareholding commercial banks,and encourage listing their shares in the market. Sixth, China Banking Supervis

21、ory Committee was created in 2003 to raise the regulatory capacity to supervise banks. Finally, adhering to the 2001 WTO accession agreement, the government uses the entry of foreign banks into the local banking market to inject competitive pressure to the local banking industry in order to gain eff

22、iciency. Beginning from the end of 2006, foreign banks can engage in local currency business.2.1.2. Reforming corporate governance and restructuringthe balance sheet The countrys large state banks have followed several steps to undertake internal corporate reform. The first is to reform the corporat

23、e governance by inviting other investors to dilute the sole state ownership while still retaining its dominance. In particular, the banks have made an effort to seek foreign strategic partnership with the view to bringing in modern banking practices and technology. The broadening of ownership also e

24、ntails selling a portion of bank shares to the equity market to make bank management accountable to the marketplace. To successfully woo outside investors, be it strategic partners or public investors, the banks must put forward a creditable inhouse reform plan and implement it credibly. No doubt, t

25、he better and more credible the internal reform plan is, the more likely it is for the banks to attract reputable outside partners and fetch a better deal with their counterparts or in the equity market. Hence, the first step the government undertook was to strengthen the balance sheet of state bank

26、s whose credit flows had been clogged up by inadequate capital and piles of bad debts accumulated under the previous economic planning regime. In 1998, the government issued RMB270 billion (US$32.6 billion) worth of 30-year fiscal bonds to recapitalize the balance sheets of the four largest state ba

27、nks: ICBC, BOC, CCB, and ABC in order to comply with the international capital adequacy standards. Again, on December 30, 2003, the government provided US$22.5 billion each to CCB and BOC, with US$15 billion provided later in April 2005 to ICBC to support their respective listings in the Hong Kong s

28、tock exchange.Among the four largest state banks, CCB was the first to have its shares successfully listed in the Hong Kong stock exchange and thus the first to have its reform effort passed by the market test. In addition, as part of the scheme of recapitalization, the banks also issued subordinate

29、d debt to the local market:BOC, RMB60 billion; CCB, RMB40 billion; ICBC, RMB35 billion; and BOCOM, RMB12 billon. In 1999, the government created four asset management corporations AMCs, one for each of the “big four”: ICBC, CCB, BOC, and ABC, to manage RMB1.4 trillion of loans purchased from the boo

30、ks of the state banks at face value, of which 1.3 trillion were deemed non-performing (about 15% of GDP). The transaction was financed partly by central bank loan(RMB573 billion) and partly by treasury bonds (RMB820 billion). A second transferring of NPLs in the amount of RMB1.186 trillion to the AM

31、Cs took place during the period from June 2004 through June 2006. The banks also launched reform measures to improve internal management including strengthening the human resource base, introducing modern risk management practices, and moving up the standard of NPL classification to comply with the

32、international standards.2.2. Implementation of reform2.2.1. Seeking diversification and attracting foreign strategic partners Following the blueprint of reform, the banks have successfully launched and implemented the reform strategy. ICBC, CCB, BOC, and BOCOM all have their full state stake in the

33、company diluted to below 70% by incorporating non-state ownerships, which includes foreign ownership, domestic legal persons, and public ownership (publicly owned and traded shares). Among non-state owners, foreign strategic partnership usually has the highest stake in the company: ICBC, 7.2%, BOC, 13.9%, CCB, 10.3%, and BOCOM,18