China will further push forward the reform of the financial
sector on the basis of the remarkable breakthrough it has achieved
in revamping its state-owned commercial banks into joint-stock
lenders, said Zhou Xiaochuan, governor of the People's Bank of
China on Monday.
Several state-owned banks have completed the joint-stock reform
and got listed on the A-share markets, which has laid a solid
foundation for them to further improve capital adequacy ratio,
asset quality and corporate governance, Zhou told a press
conference held on the sidelines of the ongoing parliament
session.
He said capital injection by the government into commercial
banks has notched up good yields, and the state investment has
earned handsome returns.
More measures will be put into place this year to create a sound
credit environment and make lenders earn more profits, he said.
Three of the "big four" state-owned commercial banks, namely the
Bank of China, the Industrial and Commercial Bank of China, and the
China Construction Bank, have all been transformed into joint-stock
lenders with the first two listed on both the mainland and Hong
Kong bourses and the CCB on the Hong Kong stock market.
US Treasury Secretary Henry Paulson said on Thursday that China
has made substantial progress in recapitalizing four of its top
five state-owned banks and, even more importantly, inviting in
strategic investors and completing IPOs.
The Agricultural Bank of China (ABC), the last of China's "big
four" state-owned lenders to go public, is expected to finish
financial restructuring this year in preparation for public
listing.
In response to press questions, Zhou also explained the central
bank's interest rate policy. He said the central bank will actively
and prudently push forward the market-based interest rate reform,
to make the interest rate responsive to market demand and
supply.
The market-determined interest rate scheme will be improved as
the government has gradually loosened control on interest rates
setting in the monetary and bond markets, he said.
The Shanghai inter-bank offered rate (SHIBOR) went into
operation on Jan. 4. Based on the daily rate for all loans offered
by sixteen major banks, SHIBOR provides a benchmark for pricing
short-term bonds and derivatives on the money market, serves as a
key indicator of interest rates in the market, and injects real-
time market information into monetary policy.
(Xinhua News Agency March 12, 2007)