CNBC:
I have two questions. First, what is the difference between the fund-raising demand of micro, small and medium-sized enterprises (MSMEs) this year and previous years? What are your considerations? Second, what are CBIRC's considerations and opportunities for foreign investment in the virtuous circle and high-quality development of economy and finance?
Guo Shuqing:
Due to time constraints, let me give you a brief answer. We all know that the financing of MSMEs is a global issue while it was well resolved in China. When talking about the 120 million enterprises, we can see that most of them are micro and small enterprises or self-employed individuals. Data from the Ministry of Industry and Information Technology, All-China Federation of Industry and Commerce as well as Association of Small and Medium Enterprises showed that small and micro-enterprises accounted for about 30% in all those got bank loans. At the same time, some figures are higher or lower. In general, approximately 30% of the market entities can get bank loans, which is an outstanding achievement. However, we are not satisfied with this. We will continue to make good use of such means as science, technology, and digitization to better cultivate a customer-centered culture, provide good services, and mitigate difficulties enterprises face in accessing affordable financing.
Regarding the issue of foreign investment, our opening-up policies remain consistent. Since the 19th CPC National Congress, the CBIRC has adopted more than 50 opening-up policies and measures in financial sector. Among them, 34 are targeting the banking and insurance industries, with some being made into regulations. Related laws were amended accordingly and were put into practice. Though some were still under revision, generally, all these policies were carried out. As a result, more and more institutions approved by us started their operation here, such as the foreign-owned insurance companies, foreign shareholding banks, and wealth management companies, among which are internationally renowned institutions. Thank you!
Shou Xiaoli:
We can only take two more questions due to time constraints.
21st Century Business Herald:
Regarding the reforms of the provincial rural credit unions, we know that the Zhejiang Rural Credit Union has been transformed into Zhejiang Rural Commercial Union Bank. What progress has been made in other provinces? Is there any difference in the direction of reforms? Thank you.
Guo Shuqing:
The direction of reforms is the same: establishing a modern enterprise financial system. This applies to small and medium-sized banks, rural credit cooperatives, and provincial- and county-level credit unions. The specific organizational forms may vary from province to province. Some may choose to invest in its member institutions and becomes their largest shareholder, such as the case of the Zhejiang Rural Commercial Union Bank. With provinces each worked out their own plan, the CBIRC is working to guide and improve on them. We noted that some provinces proposed a double-layer structure – provincial holding company holds stakes in county-level credit unions. There are also plans of a three-tier structure and a type featuring several agricultural and commercial banks and business segments in a single province. In addition, a very small number of provincial rural credit unions were small. They were reformed into two or three rural commercial banks and rural credit cooperatives.
In a word, the forms are various. But there is a common requirement that local CPC committees and governments strengthen their management in this regard. We have made the policies clear: We will respect opinions from the locals while strengthening the Party's overall leadership; we will proceed from reality and strengthen the requirements for professional personnel; a professional manager market will be established to let professional people do professional things; and basic qualifications will be required for the management teams. What's more, we will regulate the corporate governance system strictly according to the law. The system should consist of shareholders' meetings, boards of directors, boards of supervisors, and senior management. And more importantly, we need to learn from the past and conduct a strict review on the shareholders to avoid practices such as one shareholder acquiring a controlling stake, misappropriation of funds through related-party transactions, or directly using bank funds and insurance premiums to increase leverage. In a word, the reform of rural credit cooperatives is progressing well, and yet we still need more time. Thank you.
