The State Council, China's cabinet, closed its third national financial work
conference in Beijing Saturday with formulated plans crucial to the
country's financial system over the coming few years.
The two-day meeting discussed China's current financial situation and
proposed the overall requirements and major targets for the government's
China opened the much-anticipated National Financial Work Conference in
Beijing on Friday to map out strategies for the financial sector's reform and
The meeting is expected to set the tone for finding
solutions to some crucial financial issues that have a fundamental impact on the
Chinese economy, Xinhua News Agency reported.
China has previously held two similar meetings, in 1997 and 2002. Both
produced substantial reforms.
At Friday's meeting, guidelines on reform of the Huijin Investment Co, the
financial holding company of the central bank that manages State assets in
financial institutions, is expected to be unveiled, according to media reports.
Huijin, launched in 2003, represents the State in its investments in major
financial institutions. Its operations mechanism, and whether and how it will
invest part of the country's surging foreign exchange reserve will be decided at
the meeting, according to the China Business News.
The policy bank reform reportedly will also top the meeting's agenda.
China has three policy banks the China Development Bank, the Export-Import
Bank of China and the Agricultural Development Bank of China.
Launched in 1994, the policy banks have played a vital role in supporting the
country's large-scale infrastructure, mechanical and electrical equipment sector
and State grain purchasing.
The State aims to improve the efficiency of these banks by putting them in a
more competitive environment.
The banks will have an expanded business scope and operate more
independently, but will be required to shoulder market risks, according to media
Traditionally, they have had the financial backing of the State even if they
The China Development Bank, which registered a non-performing loan ratio of
0.72 by the end of 2006, may be the first to be reformed into a commercial bank.
Caijing Magazine said it will establish a modern corporate governance
Rural financial reform discussions are expected to produce more results at
the current meeting, the media reported.
Reform plans for the Agricultural Bank of China, the last of the Big Four
State commercial banks to be reformed, are expected to be mapped out at the
Reforms may include the write-off of bad loans, establishment of a share
holding structure, strategic investments and listing.
The meeting reportedly may also push for the establishment of a multi-tier
rural financial structure, in which community financial institutions can be more
accessible to farmers.