China's banking sector
Top 10 News
On December 30, the top 10 news of China's banking industry in 2023 selected by China Banking and Insurance News was officially released.
one
** Financial work conference heldThe goal of accelerating the construction of a financial power was proposed
From October 30 to 31, 2023, the ** Financial Work Conference was held in Beijing. The meeting pointed out the direction for the development of finance with Chinese characteristics, proposed to accelerate the construction of a financial power, and further emphasized the fundamental purpose of financial services for the real economy. The goal of becoming a financial power means that the focus of the development of the financial system will shift more from improving the scale and volume to consolidating the quality and efficiency of services and improving the ability to prevent risks. In the future, in the process of optimizing the economic structure, the banking industry should make up for the key development areas and weak links, do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance, focus on key areas and weak links of the national economy, continue to increase financial supply, and effectively play the pillar role of finance in helping to stabilize growth. In recent years, China's banking industry has taken serving the real economy as the foundation of its business, and the quality and efficiency of financial services for the real economy have been continuously improved. According to data from the financial management department, the balance of RMB loans to the real economy increased from 81 in 201443 trillion yuan climbed to more than 230 trillion yuan in September 2023, with an average annual growth rate of more than 10%, basically matching the nominal GDP growth rate.
Expert commentary
Co-dean of China Capital Market Research Institute, Chinese Minmin UniversityZhao Xijun
The financial work conference established the lofty goal of accelerating the construction of a financial power, requiring the financial system to effectively improve its political position, bear in mind the "great man of the country", strengthen its mission, and resolve to fundamentally solve various problems in the financial field, so as to help build a strong country with high-quality financial development and achieve the goal of building a financial power. We should take financial services for the real economy as the fundamental purpose of doing financial work, strive to grasp the law of financial development in the new era, continue to promote practical innovation, theoretical innovation and institutional innovation in the financial industry, accelerate the construction of a modern financial system with Chinese characteristics, effectively solve the problem of low quality and efficiency of financial services for the real economy, revitalize the financial resources occupied by inefficiency, and continuously improve the efficiency of capital use. At the same time, it is necessary to adhere to the prevention and control of risks as the eternal theme of financial work, comprehensively strengthen financial supervision, effectively prevent and resolve financial risks, curb all kinds of financial chaos and financial corruption, and unswervingly follow the path of financial development with Chinese characteristics.
Related Reports:
II. II. II
Strengthened***Centralized and unified leadership of financial workNew steps have been taken in the reform of the financial system
In 2023, a new round of reform of financial regulators will kick off, drawing a new top-level design for financial supervision. In March 2023, the Communist Party of China issued the "Plan for the Reform of Party and State Institutions" and established the Financial Commission as a decision-making and deliberative coordination bodyThe Office of the Financial Commission was established as the office of the Financial Commission and included in the Institutional SequenceThe State Administration of Financial Supervision and Administration was established to be responsible for the supervision of the financial industry except for the first industry. The establishment of the State Administration of Financial Supervision and Administration on the basis of the former China Banking and Insurance Regulatory Commission is a major measure to implement the spirit of the 20th National Congress of the Communist Party of China, deepen the reform of the financial regulatory system, strengthen and improve modern financial supervision, and promote the full coverage of financial supervision. On May 18, the State Administration of Financial Supervision and Administration was officially launchedOn the morning of July 20, 31 provincial-level supervision bureaus of the State Administration of Financial Supervision and Administration, 5 supervision bureaus of cities with separate planning status, and 306 prefecture-level and municipal supervision sub-bureaus were listed in a unified manner, marking an important step in the reform of the financial regulatory system and achieving phased results. The regulatory pattern of "one bank, one commission, one session" has changed to "one bank, one bureau and one meeting", and the professionalism, uniformity and penetration of financial supervision have been continuously strengthened.
Expert commentary
Director of the Shanghai Finance and Development LaboratoryZeng Gang
The Second Plenary Session of the 20th Central Committee of the Communist Party of China (CPC) adopted the Plan for the Reform of Party and State Institutions, in which the reform of the financial management system is an important part. In a complex and severe environment, we must adhere to centralized and unified leadership to continuously solve the institutional and institutional problems in the high-quality development of finance. In recent years, China's financial industry has developed rapidly, with large scale and strong vitality. At the same time, there are some problems and contradictions. Based on this, on the whole, the current round of reform of the financial management system has the following key points: First, strengthen the party's overall leadership over financial work;The second is to unify regulatory powers and improve the efficiency of financial supervisionThe third is to comprehensively strengthen financial supervision and strengthen financial consumer protectionFourth, it is necessary to further standardize the management of state-owned financial capitalFifth, we will further promote high-level financial opening-up. This reform has also further straightened out the internal relations of China's financial supervision. It is not only the improvement and optimization of China's modern financial system, but also the efficiency of China's financial management is expected to be further improved.
Related Reports:
Three
Do a good job in science and technology financeContribute to high-quality economic development
Science and technology are the primary productive forces, and innovation is the primary driving force.
* The financial work conference proposed to "do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance", of which "science and technology finance" ranked first. In recent years, various localities have actively applied for the construction of science and technology innovation financial reform pilot zones. Following the announcement of the overall plan for the pilot zone of science and technology innovation finance reform in Jinan and the five cities in the Yangtze River Delta, on October 24, 2023, Beijing also put forward the goal of building a science and technology innovation financial service system with global influence. The successive establishment of pilot zones for the reform of science and technology finance will help the financial system better support scientific and technological innovation and realize the coordinated development of science and technology, finance and industry. At present, loans to technology-based enterprises supported by finance continue to maintain rapid growth. According to data from the financial management department, as of the end of June 2023, the balance of medium and long-term loans in the high-tech manufacturing industry has maintained a high growth rate of more than 30% for three consecutive yearsThe balance of loans to technology-based small and medium-sized enterprises has maintained a high growth rate of more than 25% for three consecutive yearsThe balance of loans to specialized, special and new enterprises in China has maintained a growth rate of more than 20% for three consecutive years.
Expert commentary
**Guo Tianyong, Professor, School of Finance, University of Finance and Economics, Director of China Banking Research Center
*The Financial Work Conference listed science and technology finance as the first of the "five major articles", reflecting the key role of science and technology in promoting economic development, as well as the important position of science and technology finance in the entire financial field, highlighting the key role of science and technology finance in promoting scientific and technological progress and industrial upgrading. The development of science and technology finance can not only provide impetus for the scientific and technological innovation of enterprises, but also help promote the transformation, upgrading and development of the entire industry, and help the high-quality development of China's economy. The pilot zones for scientific and technological innovation financial reform established in all regions of the country are important platforms for promoting scientific and technological development and industrial innovation, and are of great strategic significance for deepening the integration of finance and science and technology. The continuous growth of financial institutions' lending support for STI reflects the increasing support of the financial system for STI.
Related Reports:
Four
Ten years of fruitful results,Inclusive financial services in the banking industry have reached a new level of development
From 2013, when it was first officially written into the Decision of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reform, to 2023, China's banking industry has initially established a multi-level, wide-coverage, and competitive inclusive financial service system in the past decade. On the occasion of the 10th anniversary, the "Implementation Opinions on Promoting the High-quality Development of Inclusive Finance" was released, which clarified that the inclusive finance work of the banking industry in the next five years should focus on building a commercially sustainable, affordable and risk-controllable inclusive financial development model, and achieve high-quality development in a wider field, deeper and wider scope, and further strengthen the support of financial institutions for small and micro business entities and inclusive groups in the "three rural" fields. According to data from the financial management department, as of the end of September 2023, the balance of inclusive small and micro enterprise loans was 2874 trillion yuan, with an average annual growth rate of about 25% in the past five years, an increase of more than 2 times compared with the end of 2018. As of the end of August 2023, the balance of agriculture-related loans was 558 trillion yuan. Consumer finance, an important part of the inclusive financial system, has also made great progress, according to the Boston Consulting Group**, China's consumer finance market is expected to grow at about 7% in the next five years, and the total size of consumer finance will reach 25 trillion yuan by 2027.
Expert commentary
Dean of the School of Finance, University of International EconomicsWang Tianyi
Over the past decade, China's banking industry has made significant progress in inclusive financial services, not only with the rapid evolution of digital inclusive finance, but also with the initial establishment of a financial service system for rural revitalization. In addition to the quantitative growth mentioned in the news, the cost of funds has been significantly reduced, with the average interest rate on newly issued inclusive small and micro enterprise loans falling to 4.8%, a significant decrease from five years ago. In this context, the release of the "Implementation Opinions on Promoting the High-quality Development of Inclusive Finance" emphasizes the focus of banks' inclusive finance work in the future, puts forward the development goals of "business sustainability, affordable costs, and risk control", and puts forward new requirements for banks' risk management capabilities and technology investment to reduce costs and improve efficiency. In the future, how to achieve dislocation competition among various types of banks for inclusive finance, improve capital efficiency, and shift from a single loan support to a comprehensive financial service model will be areas worthy of special attention.
Related Reports:
Five
25 articles to support the private economy were issuedHelp private enterprises to develop and grow
In 2023, the banking industry will continue to optimize and improve financial services by seizing the key to recovering and expanding effective demand, which has strongly supported the recovery of the national economy. In November, eight departments, including the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission, jointly issued the Notice on Strengthening Financial Support Measures to Help the Development and Growth of the Private Economy. The notice makes it clear that in terms of the total amount, it is necessary to increase financial support for private enterprises and gradually increase the proportion of loans to private enterprises by formulating annual service targets for private enterprises and increasing the weight of related businesses serving private enterprises in performance appraisal. In terms of structure, it is necessary to increase support for key areas such as scientific and technological innovation, specialization, special innovation, green and low-carbon, and industrial base reengineering projects, as well as private small, medium and micro enterprises. In the first three quarters of 2023, loans to private enterprises increased by 67 trillion yuan, an increase of 683.6 billion yuan year-on-year. In addition, the financial management department also proposed to meet the reasonable financing needs of real estate enterprises under different ownership systems without discrimination. According to the data, since November 2023 alone, the five major state-owned banks of industry, agriculture, China, construction and communications have invested more than 30 billion yuan in development loans to non-state-owned real estate enterprises. In the first three quarters of 2023, loans to private enterprises increased by 67 trillion yuan, an increase of 683.6 billion yuan year-on-year.
Expert commentary
Dong Ximiao, chief researcher of Zhaolian and part-time researcher of the Institute of Financial Research of Fudan University
The private economy is an important part of China's socialist market economy, and we must unswervingly encourage and support the private economy and private enterprises. The most fundamental thing is to adhere to the rule of law and marketization, adhere to the openness and transparency of laws and rules, and stabilize the confidence and expectations of private enterprises and private entrepreneurs. The 25 measures for financial support for the private economy will help optimize the allocation of financial resources for the private economy and create a better financial environment for private enterprises. In the next step, we should continue to take measures from the credit market, bond market, capital market and other aspects, and take multiple measures to solve the pain points and difficulties of financial services for private enterprises. Among them, the banking industry should play the role of the main force, adjust the system and mechanism, develop digital finance, increase credit support under the principle of maintaining business sustainability, further increase the proportion of "first loans" and credit loans for private enterprises, improve the effectiveness and accuracy of comprehensive financial services, and improve financing supporting policies.
Related Reports:
Six
A number of policies to strengthen risk management have been introducedThe foundation for the steady development of the banking industry has been further consolidated
In order to effectively prevent and control credit risks and promote the improvement of risk management in the banking industry, in 2023, the financial management department officially issued the Measures for the Risk Classification of Financial Assets of Commercial Banks (hereinafter referred to as the "Measures"). At the end of the year, the State Administration of Financial Supervision and Administration also promulgated the Measures for the Management of Capital of Commercial Banks (hereinafter referred to as the "New Capital Regulations"). The Measures put forward higher requirements for the asset management capabilities of commercial banks, and the classification of credit risk management of commercial banks is more accurate and strict, which is conducive to the long-term and steady development of commercial banksThe new capital rules improve the matching of capital supervision with the scale and complexity of banks, and help reduce the compliance costs of small and medium-sized banks without relaxing the prudential supervision requirements. The above two new regulations will play a role in improving banks' ability to prevent and resolve financial risks, guiding commercial banks to optimize and adjust their asset structure, and increasing support for the real economy.
Expert commentary
Liao Zhiming, chief analyst of China Merchants Banking Industry
The promulgation of the Measures for the Risk Classification of Financial Assets of Commercial Banks and the Measures for the Management of Capital of Commercial Banks has had a profound impact on the future operation of the banking industry. The Measures for the Risk Classification of Financial Assets of Commercial Banks expands the risk classification from credit assets to all financial assets under the bank books, and clarifies the relationship between the five-level classification of financial assets and accounting treatment, which will make the risk classification of financial assets of banks more standardized, and the asset quality data more authentic and reliable, which is conducive to the effective prevention and resolution of credit risks in the banking industry. As a regulatory document for China's implementation of the Basel II Accord, the Measures for the Capital Management of Commercial Banks put forward new requirements for the refinement of banks' capital management, promote the convergence of domestic banks' capital measurement rules with international rules, and improve the international comparability of capital adequacy ratio data. At the same time, it has a guiding role in banking business, which will enable banks to better serve the real economy and reduce the idling of funds.
Related Reports:
Seven
The process of reform of small and medium-sized banks has been acceleratedThe roadmap for risk management is becoming clearer
* The Financial Work Conference emphasized that financial supervision should be strengthened in an all-round way, financial risks should be effectively prevented and resolved, and it was proposed to "deal with the risks of small and medium-sized financial institutions in a timely manner". In 2023, the financial management department will continue to promote the reform of small and medium-sized banks to reduce risks, accelerate the reform of rural credit cooperatives under the "one province, one policy", and steadily promote the reform, restructuring and risk resolution of urban commercial banks and village and township banks. During the year, the rural credit system ushered in a wave of reform, and the reform of provincial associations in various regions achieved remarkable results, Henan Rural Commercial United Bank, Liaoning Rural Commercial Bank and Shanxi Rural Commercial United Bank were successively approved to be established or established, and Gansu, Sichuan, Xinjiang and other places have also put forward the reform goals of provincial associations. More than 100 small and medium-sized banks have changed their shareholdings, and a number of urban commercial banks and village and township banks have successively obtained local state-owned assets and increased holdings from the main initiating banks during the year, and at least 7 rural and township banks have been dissolved due to the absorption and merger of the main initiating banks. China's small and medium-sized banks have steadily advanced in the reform of risk reduction, and the pattern of more than 4,000 small and medium-sized financial institutions with total assets of nearly 80 trillion yuan has ushered in changes.
Expert commentary
Wang Jian, chief analyst of the financial industry at the Guoxin ** Economic Research Institute and researcher at the Institute of International Monetary Studies of the Chinese People's University
Domestic small and medium-sized banks as a whole show the characteristics of "more quantity and weak quality". In recent years, with the rising complexity of China's economic development and the continuous deepening of structural adjustment, the scale expansion of small and medium-sized banks has slowed down, non-performing banks have continued to be exposed, their own hematopoietic function has weakened, and risks have been accumulated. However, in the long run, although mergers and acquisitions can resolve the current operational risks faced by small and medium-sized banks to a certain extent, they cannot guarantee that the operating capabilities of small and medium-sized banks will be improved. In the face of development difficulties and resource constraints, as well as the changes in the demand for banks in the real economy, we believe that the business model of small and medium-sized banks needs to be changed urgently, and the development direction can focus on the direction of science and technology finance, inclusive finance, wealth management and other directions.
Related Reports:
Eight
Contribute to the joint construction of the "Belt and Road".The opening up of the banking industry has entered a new stage
2023 marks the 10th anniversary of the Belt and Road Initiative. Under the guidance of the financial management department, banking institutions continue to optimize and improve the layout of overseas institutions, and continue to expand the coverage of financial services for the Belt and Road countries. According to data from the financial management department, as of the end of June 2023, 13 Chinese banks had set up 145 first-level institutions in the 50 countries under construction. With the deepening of the opening up of China's financial industry, the role of China's banking financial institutions in the international financial system is becoming more and more important. On November 27, the Financial Stability Board (FSB) announced the 2023 Global Systemically Important Banks List (G-SIBS), with Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications on the list, among which Bank of Communications was selected for the first time. In the context of the "going out" of banking financial institutions, it is of great significance to continuously improve their risk management capabilities. In 2023, the State Administration of Financial Supervision (FSA) issued the Measures for the Country-by-Country Risk Management of Banking Financial Institutions, which provides an important basis for banking financial institutions to prevent overseas business risks.
Expert commentary
Postal Savings Bank researcher Lou Feipeng
Financial opening-up is an important part of China's opening-up, and expanding financial opening-up is an inevitable requirement for building Chinese-style modernization. China has built the world's largest banking system, and the overall strength and competitiveness of the banking industry are leading in the world. On the basis of the remarkable results achieved in the expansion of the opening up of the banking industry, it is also necessary to adhere to the equal emphasis on "bringing in" and "going out" in accordance with the decision-making and deployment of the first financial work conference, and steadily expand the institutional opening up of the financial sector. Serving the real economy is the fundamental purpose of finance, and the banking industry should not only do a good job in opening up to the outside world, but also give full play to the function of financial services to serve and promote the high-level opening up of the economic field. In the process of expanding the opening up of the banking industry, it is necessary to adhere to the overall coordination of financial openness and security, do a better job in risk management to prevent cross-border risk transmission and resonance, and effectively achieve high-level opening-up and high-level security.
Related Reports:
Nine
Housing credit policies continue to be optimizedHelp stabilize growth and expand domestic demand
In order to promote the steady and healthy development of the real estate market, in 2023, various local ** and financial management departments will successively introduce various policies to boost the real estate market, adjust the standard of ordinary housing, optimize differentiated housing credit policies, support the reasonable financing and M&A needs of real estate enterprises with different ownerships, and actively explore the "three major projects". Among them, in order to better meet the demand for rigid and improved housing, the current differentiated housing credit policy for individual housing loans has been adjusted and optimized, and various localities have been supported to make good use of the policy toolbox according to the city's policies, and guide the actual down payment ratio and interest rate of individual housing loans to decline. Under the situation of frequent policies and good expectations, the amount and area of commercial housing sales have improved marginally. According to the data, as of November 2023, the reduction of the interest rate of the stock of housing loans has been basically completed, and the interest rate of more than 22 trillion yuan of the stock of housing loans has been reduced, with an average decrease of 0.73 percentage points, benefiting more than 50 million households, 1500 million people, reducing the interest expense of borrowers by 160 billion yuan to 170 billion yuan per year, and reducing the average household by 3,200 yuan per year.
Expert commentary
Zhou Maohua, macro researcher of financial market of Everbright Bank
In recent years, according to the changes in the domestic real estate and macroeconomic situation, on the basis of insisting on housing for living and not speculation, emphasizing city-specific policies and precise regulation and control, and better meeting the rigid demand and improved demand, China has adjusted and optimized differentiated housing credit policies to guide local policies and precise regulation and control according to the city, reasonably reduce the threshold and burden of house purchase, better meet the rigid needs of residents and the demand for improved housing, boost the confidence of the property market, and promote the real estate market to accelerate the virtuous cycle of supply and demand and sustainable development. At present, the effect of domestic real estate regulation and control policies is gradually emerging, the real estate market as a whole has passed the darkest moment, and the overall sales and housing prices of the property market are showing signs of stabilization and recovery. Subsequently, with the steady recovery of the economy, the scar effect of residents gradually faded out, and the cumulative effect of the domestic package of policies to stabilize the property market (force at both ends of supply and demand) was released, and the real estate is expected to gradually stabilize and rebound.
Related Reports:
Ten
Improve the pricing mechanism of deposit interest ratesThe real economy has been strengthened
Since September 2022, deposit rates have been cut four times. Since 2023, the banking industry has carried out several rounds of "interest rate cuts", and the overall decline has increased from 03%—0.6% ranged. With the continuous reduction of deposit interest rates, for depositors, in the face of the difference in deposit interest rates between regions, more and more depositors choose to deposit across provinces, thus giving birth to "deposit special forces". From the perspective of banks, to a certain extent, it alleviates the pressure on banks' interest margins, further optimizes the management of liabilities, and helps banks achieve steady development. In October 2023, the China Banking Association issued the "Proposal on Adjusting Some Bank Services** to Improve Service Quality and Efficiency", proposing to cancel the production cost of commercial bills, reduce the handling fee of bank acceptance bills, reduce or exempt the printing fee of personal deposit account statements, implement the cost pricing method for the production cost of security authentication tools, and comprehensively improve the quality and efficiency of credit card services. The implementation of various measures has further reduced the cost of capital circulation, further optimized the business environment, and improved the quality and expansion of consumption, which has played a positive role in helping the high-quality development of the national economy.
Expert commentary
Liao Shuping, senior researcher of Bank of China Research Institute
Finance is the blood of the national economy, and serving the real economy is the fundamental purpose of financial work. At present, China is in the process of economic recovery with wave-like development and zigzag progress, and maintaining reasonable and abundant liquidity and promoting a steady and moderate reduction in comprehensive social financing costs will play an important role in solving the shortage of effective demand and improving social expectations. On the one hand, improving the pricing mechanism of deposit interest rates and lowering deposit interest rates will help commercial banks reduce debt costs and alleviate the pressure of continuous narrowing of net interest margins, thereby creating space for banks to improve the quality and efficiency of serving the real economy, drive more funds to flow into the market, and expand monetary **. On the other hand, the adjustment of banking services** will help further reduce the burden on small and micro enterprises, individual industrial and commercial households and the general public by continuing to reduce fees and profits in some areas with high frequency use and strong demand for fee reduction, so that the policy dividends of reducing financing costs will directly reach the entities, thereby stimulating consumption and investment potential, helping to expand domestic demand and promoting high-quality economic development.
Related Reports:
Reporter Qiu Zhaoyan, Feng Nana, Hu Yang, Du Xiaojin.
Intern reporter Wu Bin.
Edited by Han Yeqing.
Visual Zhang Fan.