THE ONCE AND FUTURE FINANCIAL CENTRE?
Within the Chinese banking world, the keenest rivalry is about which cities should be authorized to act as autonomous financial centres. China is unique in having no natural centre for its financial system. Beijing is the political and administrative capital, where the People's Bank (the central bank) and the other national banking organizations have their headquarters. But Beijing cannot match in commercial and industrial importance conurbations like Shanghai and Guangzhou on the coast or Wuhan and Chongqing in the Chinese heartland.
The protracted public debate over the creation of a network of financial centres to meet the needs of a vast country with a totally inadequate communications system marks a major break with the traditional outlook of the Chinese Communist Party. When Mao Zedong Thought reigned supreme, the cities were despised. The country's economic thrust was seen as coming from the countryside. During the Cultural Revolution (1966-76), the cities were forced to transfer funds, plant and equipment and educated people on a vast scale to remote rural regions.
The Prime Minister, Zhao Ziyang, has played a large part in reversing this policy. He has insisted, during well-publicized tours of the nation, that the urban centres have a major contribution to make to China's growth.