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People's Daily Online>>China Politics

Banking monopoly by State sector targeted

By Gao Changxin  (China Daily)

08:39, April 05, 2012

Consensus among leadership to let private capital play greater role

A consensus has been reached among Beijing's top leadership to reduce, if not break, the State sector's banking monopoly, Premier Wen Jiabao said.

This was the first time that Beijing acknowledged the monopoly of State-owned banks following last month's announcement of a pilot project to reform the financial sector in Wenzhou, an eastern coastal city with a tradition of entrepreneurship.

Wen made his remarks during a visit, from April 1-3, to companies in Fujian province and the Guangxi Zhuang autonomous region.

Economists have long complained about a lack of progress in reform of the State-dominated banking and financial industry and of inadequate service for the country's large number of small and medium-sized enterprises.

In the latest session of the National People's Congress some lawmakers painted the banking sector as an "industry of windfall profits".

"Regarding raising funds for your businesses, I think it has been too easy, quite frankly, for our banks to make profits,'' Wen told businessmen during his visit.

"The reason is that a small number of large banks are in a monopolistic position. It is only from them, and nowhere else, that companies get the loans they need.

"This is why we've now come to make way for private capital to enter the financial services sector, which ultimately requires breaking monopolies. There is already a consensus among the central leadership, which is reflected, as you can see, by the pilot reform in Wenzhou.

"I think some successful practices from Wenzhou's pilot reform can be introduced nationally. Some of the practices may even be immediately implemented," the premier said.

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Leave your comment3 comments

  1. Name

william stuyvesant at 2012-04-0694.109.140.*
You shouldn"t give room to private banking in China! That"s what happened in the USA where the governement is taken hostage by a private group of banks: the Fed.
wende at 2012-04-0571.255.86.*
There are many ways to skin a cat. Inviting big foreign banks may not be the answer. Be very careful with US banks as they ruined European banks with their derivatives.
Canada at 2012-04-0570.36.49.*
Wouldn"t private enterprise banks make the same or more profit, the difference being it goes to high priced CEO"s, managers, traders, & shareholders? Doesn"t the profit the State owned banks make help pay for China"s social security net, medicare, infrastructure, etc? Perhaps more capital is needed than the SOB are willing to loan? Privately owned banks often charge exorbitant fees for everything the imagination can dream up, and they seem to concoct one scam after another.

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