chinese banking system.pdf - The Chinese Banking System...

  • No School
  • AA 1
  • 12

This preview shows page 1 - 2 out of 12 pages.

53 BULLETIN | SEPTEMBER QUAR TER 2012 Size and Structure of the Chinese Banking System The Chinese banking system is large relative to the size of the Chinese economy and has expanded significantly over the past decade. Consolidated banking system assets (including assets in Chinese banks’ foreign branches and subsidiaries) were equivalent to around 240  per cent of GDP at the end of 2011, up from around 200  per cent in the early 2000s (Graph 1). Domestic credit is estimated to be equivalent to 145 per cent of GDP. This credit- to-GDP ratio is high relative to countries with similar levels of per capita income (IMF 2011a). Other funding sources in China are less developed than intermediated credit: debt securities outstanding (excluding central government and central bank debt) and equity market capitalisation are each equivalent to around 30–40 per cent of GDP. 1 The five largest banks in China are, in order of decreasing size, Industrial and Commercial Bank of 1 The comparison between the bank credit and the debt securities markets as funding sources in China is complicated by the fact that Chinese banks are the main purchasers of corporate bonds in the primary market. China’s equity market is relatively small, partly because numerous Chinese non-financial companies have raised equity capital offshore, particularly on the Hong Kong stock exchange. China (ICBC), China Construction Bank (CCB), Bank of China (BOC), Agricultural Bank of China (ABC) and the Bank of Communications (BCOM). Together these banks account for around one half of Chinese banking system assets and deposits. These banks are majority-owned by the Chinese state, but have private sector shareholders through their listings on the Hong Kong stock exchange. (See Box A for background on the evolution of the Chinese banking system, including the restructuring and public listing The Chinese Banking System * Grant Turner and Nicholas Tan are from Financial Stability Department; Dena Sadeghian is from Economic Group. Grant Turner, Nicholas Tan and Dena Sadeghian* The Chinese banking system is critical to the functioning of the Chinese economy, being the main conduit through which savings are allocated to investment opportunities. Banking activity in China has grown rapidly over the past decade in association with the expansion of the Chinese economy, and the Chinese banking system now includes some of the world’s largest banks. Chinese banks have become more commercially orientated over this period, although the Chinese Government retains considerable influence over their activities. This article examines the size and structure of the Chinese banking system and the key characteristics of banking activity in China. The regulatory and institutional arrangements for banking in China are also outlined. 0
Image of page 1

Subscribe to view the full document.

Image of page 2
  • Fall '19
  • Chinese Banks

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes