Banking optimization: China continues to improve the sector

07/08/2019

 

The process is favored by the concentration of more assets by five large state-owned banks

 

China is improving the banking sector and its operations. This is confirmed by the banking and insurance regulator of the country, which confirmed a better optimization of the sector, also thanks to the concentration of more activities by five large state-owned banks.

According to CBIRC (China Banking and Insurance Regulatory Commission) on its website, the total assets of the five state-owned banks amount to 105 trillion yuan (about $ 15.17 trillion), which represents 37% of all financial institutions banking.

In particular, the five state-owned global commercial banks include the Bank of China, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the China Construction Bank and the Bank of Communications.

 

The CBIRC has made it known that China should continue to accelerate its structural reform

 

At the end of 2018, China could count 4,588 banking financial institutions covering over 20 types of banks, as confirmed by the CBIRC data. Of the sector’s total, the balance of deposits and loans of the five state-owned banks represented 44% and 38% respectively.

However, compared to the United States and the main economies in Europe, the Chinese domestic banking system has registered a lower concentration. With the reform of mixed ownership promoted in recent years, in fact, the number of financial institutions controlled by private capital has exceeded 3,000. Private capital represents 40, 50 and 80% respectively in the capital of capital banks, city commercial banks and rural cooperative banks.

Given the current economic scenario, CBIRC has made it known that China should continue to accelerate its structural reform from the financial supply side, thus optimizing the banking services system.

 

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