21st Century Business Herald:

 I have two questions. First, there’s a rumor, Mr. Guo, that you will be in charge of the reform of the regulatory system, for example merger of CBRC, CSRC and CIRC. What can you say about this? Second, there has been a further increase of non-performing loans in the banking industry. What will CBRC do this year to address this issue? Thanks.

Guo Shuqing:

For the first question, the interpreter just now answered on behalf of me as he used the word “rumor” in his translation. As for the second one, it is quite normal to see volatility in non-performing loans at a time when the country’s economy has entered a “new normal” condition, economic growth slows down, economic restructuring intensifies and new economic growth drivers begin to emerge. Of course, the problem this time is worse than before. However, compared to other countries, a rate of 1.91 percent of non-performing loans in the entire banking sector, and 1.74 percent of non-performing loans for commercial banks are actually not too high. We have not included such aspects like overdue loans for more than 90 days and those on the “watch” list in our calculations. They won’t make a big difference to overall asset quality.

Ten years ago, China’s banking industry began equity division reform before getting listed on the stock market. After radical reform, we have established an internal risk control mechanism, a market-oriented management system, a constraint mechanism as well as an external supervision mechanism. These mechanisms are complete. Against the backdrop of a complicated domestic and international situation, there might be some problems, but they are quite understandable, and the overall situation is quite healthy. With strong leadership of the CPC Central Committee with Comrade Xi Jinping as the core, support from all walks of life, especially business circles, media supervision, the unremitting efforts of all banking sector staff and the conscientious devotion of the regulatory body, I’m convinced that any risks and problems can be properly solved. Thank you.