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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