China unveils reforms for big policy lenders
State Council announces plans to better align three leading banks with national objectives
China has laid out reforms for its three policy-oriented lenders so that they can better serve Beijing’s overseas goals and development inside the country.
Analysts expected the reforms could allow the China Development Bank, which had 8.2 trillion yuan (HK$10.2 trillion) at the end of 2013, to take a more proactive role in the “One Belt, One Road” initiative – a programme under President Xi Jinping’s plans to bolster links with the rest of Asia and Europe through investment in infrastructure.
Under plans approved by the State Council in notices made public on Sunday, the devolopment bank will evolve from a pure policy lender into a “development financial institute” that will not only “serve the country’s strategies” but also “operate based on market rules, and strive for break even or small profits”.
Ding Zhijie, a professor at the University of International Business and Economics, told Xinhua that repositioning the instituion from a general policy bank would underscore a shifted emphasis to even longer investment cycle projects that often carry higher risks.
Guo Tianyong, a senior banking researcher at the Central University of Finance and Economics, said: “The bank is expected to become an important force to support the country’s Silk Road development.”
A statement posted on the bank’s website in January cited bank president Zheng Zhijie as saying that its global focus would be to support “Silk Road” projects under President Xi Jinping’s plans to bolster links with the rest of Asia and Europe through investment in infrastructure.
“Domestically, the CDB will also play a big role in China’s new urbanisation initiatives, supporting projects related to people’s livelihoods, such as social housing,” Guo said. He said the bank might still enjoy sovereign ratings, although it would have more say in choosing projects.