Reform of State Owned Commercial Bank Makes Intermittent Progress
Corporate Governance Reform Still Underway
----Tang Shuangning
Vice Chairman of the China Banking Regulatory Commission
Speech at APEC Finance development Program Annual Forum
November 28, 2004 Sanya Hainan
Ladies and Gentleman,
Good Morning! I am glad to have the opportunity to attend the APEC Finance development 2004 Annual Forum. According to the agenda, I ‘d like to make a keynote speech on the theme” Reform of State Owned Commercial Bank Makes Intermittent Progress; Corporate Governance Reform still underway”, combining with the latest Progress in the China State Owned Commercial bank reform, I hope my speech will be conducive to enhance your awareness of China State Owned Commercial bank reform.
Ⅰ.Reform of State Owned Commercial Bank Makes Intermittent Progress
At the end of last year, China government made substantial strategic decisions to choose Bank of China and China Construction Bank as pilot reform, restructuring the above mentioned two SOCBs into joint-stock commercial banks. Chinese government injected US$45 billion from the official foreign exchange reserves at the end of 2003 into the BOC and the CCB to boost their capital strength, which symbolize the launch of restructuring of SOCBs into joint-stock commercial banks.
The ultimate goal of comprehensive reform of SOCBs set by China government is “ centering closely on issues of reforming the management system, improving the governance structure, transforming the operating mechanism and realizing better performance, ” Under the leadership of Leading Office of the State Council for Pilot Joint-Stock Reform of the State-Owned Commercial Banns, two pilot banks speed the step of implementing financial restructuring and corporate governance. Up to now, the two pilot banks have finished the major financial restructuring.
Three steps to implement listed follows,
1.Cutting off “historical burdens” and conducting financial restructuring.
2.establishing joint-stock corporation and implementing corporate governance reform
3.making opportunities to go list and enduring the test of stock market.
Ⅱ.Corporate Governance Reform will level with international discipline
CBRC has set ten criteria for good corporate governance and seven benchmarks for assessing the business performance of the two pilot banks.
Ⅲ.Corporate Governance Reform Still Underway
1.Ensuring effective operation of new mechanism
2.Taking full and careful consideration of going list
3.Evaluating the mechanism seriously with consideration of future.
4.Pushing the reform with consideration of the interests of employees
Although the joint stock Reforms of two pilot Banks have made Intermittent Progress, Corporate Governance Reform still underway
If we focus on the core issue of corporate governance reform, imbibing international experience with China’s actual in mind, we will succeed in the end .
Thank you.
