State-owned commercial banks should do more to improve their
overall competitiveness - a crucial part of China's financial
reform - a senior official of the nation's central bank said
yesterday.
Speaking at the First Annual China Bankers Forum 2007 held over
the weekend in Shanghai, Wu Xiaoling, the deputy governor of the
People's Bank of China, said State-owned commercial banks face the
pressure of increasing competition in financial intermediate
services and product innovation.
"Banking reform in China is a long-term task, which must go
deeper to ensure the success the financial reform as a whole," Wu
said.
Improvement in governance structure and human resources are
considered a major dual focus in reform. Further efforts should
also be made strengthening the product pricing power of the
State-owned commercial banks.
Wu also highlighted the remarkable achievements of the
State-owned commercial banks in the past year in areas of increased
profitability and asset quality improvement.
Bankers and financial industrial experts agreed China's rapid
economic growth posed an urgent need to accelerate development in
banking sector. They further highlighted the importance of a clear
regulation framework and a sound macro economic environment.
Wu Jinglian, an economist of the Development Research Center of
the State Council, said the establishment of a well ordered
financial derivatives market is the most effective way to support
the development of the banking sector.
"The government should keep the banks at arm's length, without
intervening in core bank business," he said.
The building of a reliable and effective social credit system
was also considered key to the healthy development of China's
commercial banks.
Hu Zuliu, managing director of Goldman Sachs (Asia) L.L.C. said
the government should serve the financial market rather than
control it.
"The financial market should rely on itself to conduct necessary
adjustments and the excessive intervention of the government should
be avoided," Hu said.
(China Daily July 2, 2007)