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Lecture on Banking System in China

Learn about the reforms in the Chinese banking system from 1979 to present, including the establishment of specialized banks and the growth of the banking sector.

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Lecture on Banking System in China

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  1. Lecture on Banking System in China www.AssignmentPoint.com www.assignmentpoint.com

  2. Banking System in China www.assignmentpoint.com

  3. Three specialized Banks - www.assignmentpoint.com

  4. Chinese Bank reforms : 1979-92 • Two stages of reform have been undertaken , from 1979 to 1992 and 1993 to present . • Stage one began with the creation of a ‘two-tier’ banking system. • Between 1979 and 1984 the specialized banks were separated from direct control of the PBC/MoF. www.assignmentpoint.com

  5. In 1984- • the Industrial and Commercial Bank of China (ICBC) was established, • To assume the PBC’s deposit taking function • Granting loans to state owned industrial and commercial enterprises in urban areas In 1985- • The ICBC, the ABC, BOC and CCB were allowed to accept deposits and make loans to households and corporates, via nation-wide branches www.assignmentpoint.com

  6. PBC in 1984- • Officially became the central bank. • Assigned the tasks of formulating monetary policy • Supervising all financial institutions • Because of its continued role in economic development it differed from its western counterparts www.assignmentpoint.com

  7. Between 1985 and 1992- • To promote more competition, the Chinese government permitted the establishment of new “small and medium-sized” commercial banks • Which initially offered universal banking services to households and firms, mainly in the regions and cities. www.assignmentpoint.com

  8. This group included- • The Shenzhen and Guangdong Development Banks • The CITIC Industrial Bank • Bank of Communications • China Merchants Bank • China Everbright Bank • Hua Xia Bank www.assignmentpoint.com

  9. Changes because of Banking reforms(first stage)- • rapid growth in the banking sector’s assets and liabilities • Deposits increased by 25 times • By 1992 the market share of the state owned banks was still very high(84% of loans & 78% of Deposits) • The rural credit cooperatives had higher deposit and loan shares than the small/medium-sized commercial banks • Foreign banks had no deposits, and just 1% of the loan maket. www.assignmentpoint.com

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