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Non-banking financial institutions are playing an increasingly important role in China's financial system, a central bank official said yesterday.
From practically zero two decades ago to more than 400 institutions managing 1.8 trillion yuan (US$216.9 billion) of assets by the end of last year, non-banking financial institutions have experienced rapid growth in China.
Securities and trust firms, insurers and fund managers as well as leasing and finance corporations, are quickly catching up with the dominant force of commercial banks in the country, said Xia Bin, director of the Supervision Department of Non-banking Financial Institutions at the People's Bank of China, China's central bank.
The two groups have also strengthened business cooperation over the past few years, with insurance and securities firms clinching partnerships with banks to promote each other's services.
"That helps divert more savings into investment and pushes forward China's overall financial reform," said Xia at a financial seminar that opened yesterday in Beijing.
"Vigorous financial innovations in these non-banking institutions also provides more business opportunities for banks," he said.
For example, the quick expansion of the stock market has nurtured a growing number of customers for account transfer services provided by banks, which facilitates the transaction of money between savings and stock trading accounts.
More banks are also doing agent services like collecting premiums for insurance companies.
Wu Xiaoling, deputy governor of the central bank, said that whether financial institutions in different businesses should be regulated separately or put under a unified regulation is a major issue under discussion by the Chinese authorities in financial system reform.
(China Daily 07/18/2001)
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