CHINA'S BANKERS BEGIN TO GET OUT OF THE RUT
"China's banking system had its Big Bang two years ago," observed a People's Bank official. "Some complain that it was like a nuclear explosion and that we are not suffering from fall-out."
The Chinese Government's decision to transform the entire banking structure from January 1984 has had a dramatic impact on the financial environment. Bank personnel, whose principal task for 30 years had been to act as book-keepers and cashiers for the central administration, found themselves evaluated on their ability to generate profits.
Whereas bank branches had traditionally provided both the rural and urban economies with working capital and investment funds in strict accordance with state plans and directives, today they are expected to evaluate credit requests on their own responsibility.
Most traumatic of all, according to several bank executives, bank branches have to ensure that they receive regular interest payments and full repayment of the original loan, in contrast to the former practice by which the state's budget allocation meant that capital finance was provided by the banks on a free, non-refundable basis.
"Going back to normal commercial banking sounds fine," said a Chinese banker with western professional qualifications.