China News Service:

In recent years, there have been two phenomena taking place. On the one hand, excessive credit funds have flowed from banks into "big clients," including big cities, big enterprises, big projects, and some specific sectors. In contrast, credit to private enterprises and small and microbusinesses have been squeezed. But on the other hand, banks have made a big push to provide targeted inclusive loans to small and micro businesses, increasing the risk of non-performing loans and squeezing profits, which influenced shareholder's returns. I would like to know Mr. Guo's point of view regarding these two phenomena. Thank you.

Guo Shuqing:

There is indeed a big problem in banking services of excessive credit funds flowing into "big clients," especially into the real estate sector. We are now reflecting carefully on the problem and summing up experience and lessons. I think my colleagues here also know this too well. Both banks and insurance companies have suffered severe losses due to investments in high-risk enterprises and conglomerates. That's why we should improve our work in this regard.

On the other hand, while big banks and financial institutions were prompted to make their services accessible to small and micro businesses, they have begun to compete with local medium and small banks and financial institutions and squeeze their living space. Through our field trips to different places, we have heard a lot of complaints from rural credit cooperatives, rural commercial banks, and village banks, saying that the ICBC went too far by grabbing clients from them. And the CCB did this, too. Some small insurance companies also blamed big insurance companies, such as China Life and China Taiping. There were various complaints in this regard. Mr. Tian just said that the CCB had agents at more than 500,000 villages. With an iPad and a commission of 1,000 to 2,000 yuan, these agents can provide villagers with essential financial services, including depositing or withdrawing money and transaction services. So we have seen that competition is very stiff. With the development of digitalization, big banks also face the pressure to survive. The number of physical bank outlets nationwide has declined for three consecutive years. In the future, the whole banking system and its business models will embrace profound changes, and so will the insurance industry. Therefore, all we can do is to earnestly study the situations, follow the prevailing trend, keep abreast of the times, constantly promote supply-side structural reforms and improve the structures of banks and insurance companies. Thank you.

Tian Guoli:

I would like to add something here. The inclusive loans provided by the CCB are less than 800,000 yuan on average, compared to over 2 million yuan of loans provided by medium, small and micro banks. There used to be no financial services targeting clients of loans less than 800,000 yuan. Why did I stress "New Finance?" In fact, both the physical outlets and traditional services of the CCB are now declining. Recently, it was reported in Shanghai that people from across the country can now receive services such as issuing certificates and licenses at the CCB's Shanghai outlets without the hassle of travelling back to their hometowns. Another point is that people don't know much about the share price of the CCB. That may result from our lack of publicity and communication with our friends from the media. Here, I ask you a favor to help popularize the relevant information. 

Shou Xiaoli:

Thank you, Mr. Guo. And thanks to our speakers as well as friends from the press for joining us. Your hard work is greatly appreciated. That's all for today's press conference. Goodbye.

Translated and edited by Zhang Rui, Huang Shan, Mi Xingang, Wang Wei, He Shan, Liu Sitong, Zhu Bochen, Wang Yanfang, Zhang Tingting, Li Huiru, He Shan, Li Xiao, Wang Qian, Zhang Liying, Yuan Fang, Gong Yingchun, Yang Xi, Wang Yiming, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.