The banking regulator issued guidelines yesterday encouraging
commercial lenders to educate investors as more financial products
are added to the country's nascent market.
The China Banking Regulatory Commission (CBRC) also said it
would promote public understanding of modern finance, try to reduce
financial crimes and keep the financial market stable.
The regulator said more investor education was needed as new
financial products come onto the market - including funds, trusts,
qualified domestic institutional investor (QDII), foreign exchange
and comprehensive wealth management.
The CBRC will set up a system to encourage and facilitate
investor education.
That includes the CBRC Public Education Service Center and the
CBRC Public Education Online Service, which will provide wealth
management knowledge on the returns and risks of financial products
like trusts, bonds, insurance, funds and QDII. The service center
will also answer investors' questions.
Commercial lenders are being urged to provide more investor
resources including introductory brochures and other
information.
"Customer education is the key," said Chen Zuofu, vice-president
of China Construction Bank. The bank reported a 778 percent
increase in funds sales in the first half of 2007.
"Banking clients want more information. We need to set up
channels to provide this key financial knowledge," said Fan Zhanli,
a client manager at Everbright Bank Group.
The regulator said it would strengthen supervision to stabilize
the financial market and facilitate financial investment. It has
also urged banks to improve risk management and set up monitoring
systems to uncover crimes.
By the end of 2006, 30 Chinese banks were offering wealth
management services, with a total investment of 130 billion yuan.
Demand for individual financial services is growing.
"Educating and guiding investors to cope with financial
uncertainties and investment risks is crucial at this stage of the
market's development," said Shi Jianping, assistant president of
the Central University of Finance and Economics.
(China Daily January 3, 2008)
