Guy Williams - The Evolution of Chinas Banking System, 1993–2017

This book traces the development of Chinas banking system through the first 25 years of Chinas socialist market economy up to the present. It examines how Chinas leaders have chosen their own path for reforming and regulating the banking sector and shows how this approach has differed significantly from the neoliberal approach promoted by the West. The book demonstrates the effectiveness of the Chinese approach, contrasting Chinas relative success in weathering the Asian financial crisis with the huge disruption experienced by other East and Southeast Asian nations which had followed the neoliberal model much more closely. The book explains how Chinas officials were able to resist the persistent efforts of foreign financial institutions to gain control of Chinas financial sector, particularly around the time of Chinas entry to the World Trade Organization. It argues that Chinas increasing influence in international financial institutions after the global financial crisis can help mitigate the risk of future financial crises and promote global financial stability.

Guy Williams completed his doctorate at the University of Cambridge.

Routledge Studies on the Chinese Economy
Series Editor
Peter Nolan
Director, Centre of Development Studies;
Chong Hua
Professor in Chinese Development; and Director of the Chinese Executive Leadership Programme (CELP), University of Cambridge

Founding Series Editors
Peter Nolan
University of Cambridge
and
Dong Fureng
Beijing University

The aim of this series is to publish original, high-quality, research-level work by both new and established scholars in the West and the East, on all aspects of the Chinese economy, including studies of business and economic history.

Chinas Rural Areas
Building a Moderately Prosperous Society
China Development Research Foundation

Chinese Private Manufacturing Firms
The Challenges of Global Competition
Xiao Chen

First published 2019
by Routledge
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2019 Guy Williams

The right of Guy Williams to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data
Names: Williams, Guy, 1981 author.
Title: The evolution of Chinas banking system, 19932017 / Guy Williams.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2019. |
Series: Routledge studies on the Chinese economy | Includes bibliographical references and index.
Identifiers: LCCN 2018011139| ISBN 9781138496972 (hardback) |
ISBN 9781351020022 (ebook)
Subjects: LCSH: Banks and bankingChinaHistory. | Financial institutionsChinaHistory.
Classification: LCC HG3334 .W55 2019 | DDC 332.10951dc23
LC record available at https://lccn.loc.gov/2018011139

ISBN: 978-1-138-49697-2 (hbk)
ISBN: 978-1-351-02002-2 (ebk)

Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear

1978: Reform and Opening economic policy announced

1979: Agricultural Bank of China (ABC) and Bank of China (BoC) established

1983: China Construction Bank (CCB) established

1984: Industrial and Commercial Bank of China (ICBC) established, Peoples Bank of China (PBoC) becomes an independent central bank

198788: Establishment of six shareholding banks (Bank of Communications (BoCom), CITIC Industrial Bank, China Merchants Bank, Fujian Industrial Bank, Guangdong Development Bank and Shenzhen Development Bank)

1993: Three further shareholding banks established (China Everbright Bank, Hua Xia Bank and Shanghai Pudong Development Bank)

1993: Establishment of the socialist market economy

1993: Financial institutions begin pilot implementation of risk supervision according to the standards of the 1988 Basel Accord

1994: Chinas three policy banks established (Agricultural Development Bank of China, China Development Bank and Export-Import Bank of China)

199497: Regulators segregate commercial banks from security, trust and insurance sectors

1995: Guiding documents for regulatory development established, namely The Law of the PRC on the PBoC and The PRC Commercial Bank Law

1997: Asian financial crisis

1997: The First National Financial Work Meeting is held

1998: Officials announce the closure of the Guangdong International Trust and Investment Corporation (GITIC) and the restructuring of Guangdong Enterprises (GDE)

1998: The Central Financial Work Committee (CFWC) is established

1998: Recapitalisation of Chinas banks to the value of RMB 270 billion

1999: Asset Management Companies (AMCs) established for disposal of non-performing loans (NPLs)

19992002: Trust sector restructured

2001: Chinas entry into the World Trade Organisation (WTO)

2002: Programme of shareholding reform announced at the Second National Financial Work Meeting

2003: China Banking Regulatory Commission (CBRC) established

2004: Five-tier loan classification system adopted by all banking institutions

2004: Guidelines on corporate governance reforms issued for large state-owned banks

200406: Minority stakes taken in Chinas large state-owned banks by external investors

200510: Initial Public Offerings (IPOs) of Chinas Big Four state-owned banks

2008: Global financial crisis

2009: China becomes a member of the Financial Stability Board (FSB) and the Basel Committee of Banking Supervision (BCBS)

2013: Loan rate floor abolished as part of gradual liberalisation of interest rates