Traditional Culture Encyclopedia - Travel guide - Begging::: The current situation of China’s financial products~~! ! ! !

Begging::: The current situation of China’s financial products~~! ! ! !

1. Current Development Status of China’s Financial Services Industry

In recent years, with the continuous deepening of financial reform and opening up, the market environment faced by my country’s financial industry has been greatly improved, especially Since the Southeast Asian financial crisis in 1997, governments at all levels have placed financial security and steady development in a very important position, adopted a number of management measures, strengthened their own construction, and prevented financial risks, and have made great progress. However, after joining the WTO and foreign financial institutions entering the Chinese market, the pressure on various sectors of my country's financial industry will still be very high, and the current development situation is not optimistic. Below we will talk about the development status of my country's banking industry (mainly commercial banks), insurance industry and securities industry respectively.

(1) Banking Industry

At present, my country's commercial banking market is basically divided between the four major state-owned commercial banks. The degree of industry monopoly is quite high, and its business is mainly concentrated in traditional depository banks. , loan, remittance banking business and foreign exchange business, etc., and rarely or not operate all investment banking businesses, such as financial leasing business, insurance business, trust business, property consulting and consulting business and tourism advertising business, etc. These restrictions on business scope have affected the profitability and financial instrument innovation capabilities of my country's state-owned commercial banks. They have seriously insufficient capital and endogenous constraints on their lending capabilities. Due to poor performance of state-owned banks, there is great pressure to digest their own non-performing assets, and they are unable to replenish funds with operating profits. Therefore, non-performing assets are increasingly accumulating, resulting in the asset adequacy ratio of some state-owned banks failing to meet the 8% requirement stipulated in the Basel Accord. Because commercial banks have low profitability and low asset utilization efficiency, they have a large number of bad debts and doubtful debts. All these will put state-owned commercial banks at a disadvantage in competition with foreign banks.

(2) Insurance Industry

Over the past two decades, China’s insurance industry has developed rapidly with an average annual growth rate of 39.6%, achieving the first premium income of 50 billion yuan. It took 15 years, but it only took 3 years to achieve the second 50 billion yuan (see Figure 1-1, Figure 1-2). By the end of 2000, premium income reached 159.59 billion yuan. At the same time, insurance market entities are becoming increasingly diversified. Currently, there are 40 insurance companies in the country. An insurance market pattern with state-owned insurance companies and joint-stock insurance companies as the mainstay, Chinese and foreign insurance companies coexisting, and competition among multiple insurance companies has initially taken shape. However, China's insurance industry still has a series of problems, such as poor insurance company strength, few channels for using funds (the insurance industry's income is still dominated by premium surplus), low efficiency and operating technology, and poor service levels. Adapt to competition, etc. Therefore, once our insurance companies truly compete with foreign insurance institutions, the insurance industry will face a great impact.

Figure 1 my country’s premium income trend chart from 1989 to 2000

Figure 2 my country’s premium income growth trend chart from 1989 to 2000

(3) Securities Industry

my country’s securities industry started in the 1980s. After the establishment of the Shanghai and Shenzhen Stock Exchanges in 1990 and 1991, it has achieved considerable development after a tortuous journey. The first is the enhancement of financing capacity. The amount of financing in my country's securities market increased from 9.978 billion yuan in 1994 to 119.222 billion yuan in 2001, accounting for 11.45% of indirect financing (bank loans); secondly, as the scale of the securities market continues to grow, The stock trading volume also continued to grow. In 1993, the stock trading volume was 362.72 billion yuan. In 2000, the stock trading volume reached a peak of 6.08266 billion yuan, an increase of 16.7 times. In 2001, the number of listed companies in my country reached 1,154, with 66.3968 million investor accounts. The above data show that after 10 years of rapid development, my country's securities market has begun to take shape. However, since my country's securities industry developed under certain protection and has not fully integrated with the international market, there are still some problems for its further development:

First of all, the business scope of domestic securities institutions is narrow; The variety is single and the structure is similar. The business scope is limited to the three traditional domestic businesses of underwriting, brokerage and self-operation. Although corporate financial consulting services are also available, most of them are auxiliary means to obtain underwriting projects. The products and services provided are very similar and have little influence on financial innovation. The importance is still not fully appreciated.

Secondly, financing channels are not smooth and there are not many listed securities companies. There are three channels: inter-bank lending, treasury bond repurchase and capital increase and share expansion, and financing focuses on short-term financing and lacks long-term financing channels that are urgently needed for the development of securities companies.

Third, capital operation efficiency is poor.

Fourth, the asset management business of securities firms is in chaos.

Fifth, the income from securities brokerage business declined.

These all show that New China’s securities industry, which has only more than 20 years of growth history, will face huge realistic pressure when competing with foreign securities companies that have experienced more than a hundred years of capital market tempering and are strong.

2. Comparison of the development of Chinese and foreign financial service industries

In November 2001, China finally entered the WTO. It will become an inevitable trend for Chinese and foreign financial institutions to compete on the same stage. my country's financial industry must To occupy a place in this new competition, one must compare and analyze each other's strengths and weaknesses, judge one's own living environment, and finally propose one's own strategic plan.

(1) Banking industry

1. Comparison of operating scale

To measure the operating scale of a comprehensive commercial bank, it mainly includes sub-indicators such as total assets, first-tier capital, number of branches, and cross-border operations.

Table 1 Comparison of operating scale of Chinese and foreign commercial banks (1999) Unit: 100 million US dollars

Total assets

Tier 1 capital

Branch Number of institutions

Multinational operations

Industrial and Commercial Bank of China

4275.46

219.19

Domestic branches There are many institutions

Multi-national operations are in the initial stage

Agricultural Bank of China

2442.93

162.66

There are many domestic branches

Transnational operations are in the initial stage

China Construction Bank

2658.45

131.96

Many domestic branches

Transnational operations are in the initial stage

Bank of China

3162.14

152.70

Global Institutional Layout

Global Bank

Citibank

7169.37

476.99

Global Institutional Layout

Global Bank

Bank of America

6325.74

381.76

Global Institutional Layout

Global Bank

Deutsche Bank

8437.61

174.18

Global institutional layout

Global bank

Barclays

3988.25

140.55

Global Institutional Layout

Global Banks

Source: Zhang Fanglong, Ruan Banying: "Profit Comparison of Chinese and Foreign Commercial Banks and Strategies for WTO Entry", "Modern Commercial Banks" "Guide", Issue 1, 2001; Kong Yong and Ma Gengzhi, "Overview of the Assets, Liabilities and Financial Status of the World's 30 Banks", China Economic Press, 1996 edition.

As can be seen from Table 1, in terms of total assets and primary capital sources, my country’s four major state-owned commercial banks are not inferior to international multinational commercial banks and have entered the ranks of the world’s largest banks. However, from the perspective of the number of branches and cross-border operations, except for the Bank of China, which has many branches at home and abroad and has begun to take on certain characteristics of a global bank, the other three state-owned commercial banks have a large number of branches, but their cross-border operations are poor. It’s just begun. Therefore, from the analysis of operating scale indicators, the biggest gap between my country's state-owned commercial banks and foreign comprehensive banks is reflected in deficiencies in global branch layout and lagging cross-border operations.

2. Comparison of business functions

The difference in business functions between my country's state-owned commercial banks and foreign banks is mainly reflected in the restrictions imposed by the regulatory authorities on mixed operations and separate operations (see Table 2). The United Kingdom, Japan and the United States have revised relevant laws in 1986, 1992 and 1999 respectively, and finally abolished the legal obstacles to mixed operations. my country's "Commercial Banking Law" strictly prohibits commercial banks from engaging in non-banking businesses such as securities investment.

Table 2 Comparison of Chinese and Foreign Commercial Banking Business

Commercial Banking Business

Investment Banking Business

Insurance Business

Legislative restrictions by the authorities

ICBC