China development bank

Since 1978, Chinese finances have advanced at solid steps, especially with the reforms carried out in the economic system and the strengthening of openness to the outside.

China currently has a basic financial structure, in which the Central Bank exercises the function of regulating and supervising.

State banks are the main body and operations aimed at complying with political directives are separated from commercial activities.

Simultaneously, various types of financial organizations operate with a division of labor and coordination.

The new financial structure plays an active role in controlling inflation and promoting the development of the economy.

In 1984, the People's Bank of China left the savings and credit services, officially exercising the powers of the Central Bank, carrying out macroeconomic regulation and control and supervision of financial institutions throughout the country and achieving remarkable efficiency.

Ten years later, the Bank of Industry and Commerce, the Bank of China, the Construction Bank, and the Agricultural Bank became state-owned commercial banks. In addition, the Policy Banks such as the China Development Bank, the China Import and Export Bank and the Agricultural Development Bank were established, these three banks oriented to meet the political demands.

Of these three policy banks, the one with the most weight in the economy at present is the China Development Bank (CDB). Founded in 1994, the CDB is mainly dedicated to loans and investments related to long-term projects, constituting the union of certain powers of the development plan and the State treasury, as well as the Central Bank. Each year, the CBD raises funds in the financial market by issuing 300 billion to 400 billion financial debt bonds at a relatively low cost.

The CBD has become China's largest development finance institution and one of the largest of its kind worldwide, as its size and management results exceed the World Bank and the Asian Development Bank.

In order to strengthen national power, about 90% of its loans go to electricity, roads, railways, the oil industry, petrochemicals, coal, mail, telecommunications, agriculture, forestry, hydraulic works and other public infrastructure facilities within the priority sectors of the State, giving special attention to development plans in the backward region of the west and the old industrial bases in the northeast of the country.

Also in many large-scale projects is the CBD, which includes the Three Gorges power plant, electricity works from west to east, gas from west to east and water from south to north, the airport, the construction of the Beijing Olympic facilities, the Shanghai urban rail transport, the Beijing-Kowloon railway line, the nuclear power plant, as well as the "five vertical and seven horizontal" trunk state highways, the eight priority highways of the west and the national highway network.

Also to improve the living conditions of the people, the CBD supports the development of new rural areas, small and medium-sized companies, scientific and technological innovation, education, housing, medical and health services, energy saving and environmental protection, as well as response to emergencies and natural calamities, among other social sectors.

The CBD pays close attention to the main countries and regions that maintain long-term cooperative relations with China and especially to the countries and regions in its environment; It deploys international cooperation businesses and has become China's largest provider of "go abroad" business loan provider.

As for international cooperations, although the CBD is owned by the Chinese government, it engages in market-based cooperations instead of intervening directly in government-subsidized projects. Regarding the determination of the interest rate on loans, it observes international practices and market rules and offers, according to its capacity, certain preferential treatment to the priority projects of the countries that cooperate with China in order to generate internationally. greater attraction. In the meantime, you can provide necessary supports through technical assistance loans.

The CBD strives to guide the capital of commercial banks and society, takes the initiative to materialize the government's state strategy and to increase the profitability of the financial operation; It intervenes in the reform of the system and the reorganization of medium and small national financial institutions to increase the stability and competitiveness of the financial sector.

The CBD currently represents the engine of financing for China's socio-economic development and the forerunner in building the market. In practice, taking into account the national conditions of a developing country, the CBD adopts the following efficient methods.

1- Solve financing problems by building the market. As in the other developing countries, the greatest difficulty faced by China in its socioeconomic development is the weak, incomplete and backward market, so the country has to start building a new market from scratch. In this effort, having commercialized financing as a vehicle and resource, the CBD introduces the demands and methods of building the market into the rules of financial management and strives to build a healthy and profitable market and financial system to satisfy financial demand. of socioeconomic development.

2- Combine the advantages of government in organization and coordination with the advantages of CBD in financing, to form a gigantic force in the construction of the market.

In reforming the economic structure, the government has the advantage, as well as the power to form, control, readjust, manage and normalize a system framework, while development finance has the financial advantage of concentrating large sums of funds over the long term. term. In the extensive development finance cooperation with local governments, the concerned central government departments and large companies, the CBD fully utilizes both advantages and jointly promotes market development, so that on the one hand it supports development On the other hand, reciprocal benefit is achieved between the CBD and the government, increasing financial profitability and resistance against risks.

3- Putting the guiding role of finance for development into practice and promoting the progress of new sectors. Without financing, the readjustment of the government departments would cause the shortage of the internal driving force and the dysfunction of the levers in the development of the new sectors. In new sectors, the CBD plays the guiding and driving role in solving many focal and difficult problems for the government, promoting the active role of government departments and the main bodies of economic activities through financing, advance planning and construction of the market.

4- Promote scientific development with advance planning. Extending its superiority as an expert bank, the CBD maintains planning cooperation with local governments and sector departments by promoting advance planning of local and sector development through services similar to technological support and development advice from the World Bank and the World Bank. Asian Development Bank, to systematically raise the level of development of the entire region or the entire sector.

In this process, the CBD cooperates with local governments to establish a commercialized financing platform, continually increasing its capacity in financing, market management and risk control to form a series of main bodies with management healing in the market.

5- Insist on the unification of the state credit with the result of the market. As a government development finance agency, the CBD does not simply pursue state credit to the detriment of market performance, nor does it pursue only market performance to become an entity with commercial finance.

Instead, the CBD improves the market result with the state credit to sustain socioeconomic development and reinforces the state credit with the market result, raising public confidence and making the interests of both the State and the people a reality.

The CBD will take the lead in starting commercial operations, according to information released at the III National Conference on Financial Work held on January 20, 2007. This is the first time that China has officially announced the reform of non-commercial state banks, which also include the China Export-Import Bank and the China Agricultural Development Bank.

CBD business operations will target medium and long-term businesses, according to Chinese Premier Wen Jiabao. The reform measures for the three politically oriented banks will be implemented in line with the particular conditions of those three financial institutions.

According to Jiabao, China will also promote reform of other commercial banks and financial asset management companies in due course.

Final Considerations:

The CBD has already entered a new stage, in which it supports the materialization of global goals and the development strategy of the State. Building on socio-economic development and reform of China's financial system, the CBD will insist on development finance, consistently promote market improvement, and foster overall progress in the economy and society.

Meanwhile, it hopes to intensify exchange and cooperation with the economic and financial departments of all the governments of the world and with other international financial organizations. Like a bridge, the CBD will drive through financing, exchange and interstate cooperation in the economic field on the basis of reciprocal benefit.

Bibliography

Brown, L. (2005), "China's Replacing the United Status as World Leading Consumer", Earth Policy Institute, February 16.

BBC Mundo.com: "China revalued… what now?" Jul.25, 2005

Kalish, Ika: “What does the revaluation of the Chinese yuan mean? Aug. 10, 2005.

Chinese Economic Magazine, Daily News, February 21, 2005.

IMF, Direction of Trade Database, 2004. Internet.

"The Chinese currency remains stable after revaluation." Bol Press, September 19, 2005. Internet.

Mo Ram, "State Bank reform" Beijing Review, August 5, 2004

Li Zi, "Banks in China lacking money", Beijing Review, August 5, 2004.

China Development Bank, 2006 Document

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