Search results

The interbank market in China experienced remarkable squeezes in liquidity in 2013. In particular, the overnight Shanghai Interbank Offered Rate reached a historical high in June. Banks were unprepared, facing the occurrence of various liquidity demands simultaneously. Effects of the liquidity squeeze spread across markets, and concerns were expressed about the health of the banking sector in the world’s second largest economy. Yet the central bank of China maintained an unswerving view that the tightness of liquidity was only structural, and could be overcome by the commercial banks themselves. While it may be too early to judge whether the central bank was correct, or whether there is systematic liquidity risk in the banking sector, markets received a clear signal from the People’s Bank of China. The central bank stopped acting as a ‘perpetual put option’ for commercial banks and refused to take responsibility to satisfy liquidity needs in the interbank market. Its intention is clear; that is, to adjust monetary policy and support economic reform in China. The new Chinese government seems determined to steer a new course away from the previous growth episode. Its resolution has been published and actions have been taken. Among them, the central bank’s changes to monetary policy have received responses from the markets, and the People’s Bank of China is now in the vanguard of a battle to squeeze liquidity. It is difficult to predict what further actions the government will take. However, it should be aware that the driving force of economic reform in China comes from structural change and productivity improvement. Without follow-up policies, complication in the financial system could undermine the central bank’s effort and international capital flows may quickly substitute the opening position of the central bank in the interbank market. More wisdom is required if China is to win the battle for deleveraging and structural reform.

The purpose of this paper is to provide an overview of China's contemporary banking regulatory system, with particular focus on regulatory control of foreign banks trading in China. The paper addresses three aspects of Chinese banking regulation: what does China regulate; why does China regulate; and how does China regulate. Much of the discussion is concerned with China's regulatory agencies particularly with the role of the CBRC as the principal regulator in China's banking sector.

In the first instance the paper presents an overview of banking regulatory models gained from a review of theoretical literature in the area. Then through a wide ranging review of Chinese publications, both academic and official, the paper seeks to relate the course of regulatory reform in China, both in terms of compliance with orthodox regulatory theory, and the unique regulatory requirements of the Chinese banking system.

The paper recognises that China has embraced the need for banking regulation with the establishment of an institutional structure that is responsive to both banking supervision and government policy. Within that structure the role of the CBRC, the pervasive manner in which that agency operates, and the content of its regulatory output have been identified and critically reviewed.

In its review of the modernization of China's banking regulatory system, the paper achieves originality from the author's research into, and critical reflections on Chinese generated literature, both institutional and academic, which is then communicated in a manner that will be understood by readers familiar with Western banking regulatory theory.

This chapter examines China’s corporate governance and accounting environment that shapes the adoption of internationally acceptable principles and standards. Specifically, it examines international influences, including supranational organizations; foreign investors and international accounting firms; domestic institutional influences, including the political system, economic system, legal system, and cultural system; and accounting infrastructure. China’s convergence is driven by desired efficiency of the corporate sector and legitimacy of participating in the global market. Influenced heavily by international forces in the context of globalization, corporate governance and accounting practices are increasingly becoming in line with internationally acceptable standards and codes. While convergence assists China in obtaining legitimacy, improving efficiency is likely to be adversely affected given that corporate governance and accounting in China operate in an environment that differs considerably from those of Anglo-American countries. An examination of the corporate governance and accounting environment in China suggests heavy government involvement within underdeveloped institutions. While the Chinese government has made impressive progress in developing the corporate governance and accounting environment for the market economy, China’s unique institutional setting is likely to affect how the imported concepts are interpreted and implemented.

To examine the criminal laws and regulations on money laundering control in China and Hong Kong and to call for legal and institutional reforms in China.

This paper provides a comparative analysis and critically reviews the laws and regulations on money laundering control in China and Hong Kong.

China has shown a firm determination to combat money laundering since 2002. Reforms on Article 191 of the Criminal Law of the People's Republic of China (1997) and the institutional framework are called for to comply with the international standards of the FATF recommendations, the UN Convention against Transnational Organized Crime (2000) and the UN Convention against Corruption (2003) to control money laundering.

This paper highlights the problems and proposes both legal and institutional reforms on money laundering control in China.

This paper initiates the analytical research on the legal and institutional problems of money laundering control in China which had not been adequately explored.

The purpose of this paper is to assess the role of commercial banks in combating money laundering in the People's Republic of China (PRC). An effective anti‐money laundering (AML) regime within the banking sector can make a significant contribution to the fight against money laundering both nationally and internationally.

An assessment based on the AML law of China, rules and regulations issued by the People's Bank of China (PBOC) was conducted on commercial banks in Xichang City. A questionnaire and guided oral interviews were employed to collect data for the study.

The study found that all the five banks that responded to the questionnaire have, for the period 2006‐2010, not been assessed by the PBOC, despite being independently audited by external auditors. All banks have AML policies and procedures in place, have designated a compliance officer for AML activities and trained their employees.

Only five banks responded to the questionnaire as most of them were not willing to release information on their AML activities, for various reasons. This raises the question of generalizing the findings of the current study.

The paper shows the extent to which AML rules and regulations have been embraced and implemented by commercial banks at a micro level. It is envisaged that the findings of this study will encourage similar studies in other cities of the PRC and help policy makers, especially at the PBOC, to re‐align their strategies in line with what is obtaining on the ground.

This paper proposes that if a political system is more like to facilitate a unified government, to establish a strong executive body and to respond to the needs of the majority, financial reforms are more likely to emerge from the policymaking process and produce positive results. On the contrary, political systems that discourage those governing features are less likely to produce reforms. This chapter compares financial reform processes in China, Taiwan and New Zealand. All of them performed low level of financial reforms in the early 1980s but resulted in different situations later. In the mid-2000s, New Zealand heralded the most efficient and stable financial system; while Taiwan lagged behind and China performed the worst. Evidence showed that China’s authoritarian system may be the most superior in forming a unified government with a strong executive, but the policy priority often responds more to the interests of a small group of power elites; therefore the result of financial reform can be limited. Taiwan’s presidential system can produce greater financial reform when the ruling party controls both executive and legislative bodies, but legislative obstructions may occur under a divided government. New Zealand's Westminster system produces the most effective and efficient financial reform due to its unified government and a strong executive branch with consistent and stable supports from the New Zealand Parliament.

To assess to what extent Chinese domestic banks' use of internet banking as a strategic response to the entrance of the WTO is affected by factors both external and internal to the banks.

A model depicted by a path diagram is developed to test the impact of various external and internal factors considered to have an impact on Chinese domestic banks' strategic response to the accession into the WTO. Survey questions from prior studies were adopted and modified. Structural equation analyses were used for data analysis.

The research hypothesis that the increasingly competitive conditions in the banking sector resulting from China's accession into the WTO has a significant effect on Chinese domestic banks' internet banking investment decisions was confirmed.

The conceptual model and research instrument could be further refined. The sampling frame used could be expanded to cover all banks in the Chinese mainland.

Findings of the study should benefit organizations in improving their use of IT as a strategic weapon, especially for the banking industry.

This study is the first empirical research on internet banking in mainland China from a strategic perspective.

Describes the efforts made since 1979 by China to reform its financial system to support its emerging market economy; and the associated problems. Cites research evidence that the reforms have been inadequate and analyses 1986‐2000 national statistics to calculate three macro‐indicators of financial crisis, three measures of government permeability and some other ratios for the Chinese financial system. Identifies many weaknesses, concludes that it remains vulnerable to crisis and points out the potential dangers inherent in plans to allow foreign banks to engage in local currency businesses within the next five years.

The purpose of this paper is to analyze whether, and how, foreign strategic investor entry to China conveys management expertise to domestic banks. Some observers are concerned that foreign investors will be reluctant to transfer their expertise to local partners, and few skills will be acquired by Chinese banks. At the same time, the trade‐off between China's access to banking skills and foreigners' access to Chinese customers will overwhelmingly favour the foreigners.

The discussion is based on authentic cases collected from the China Banking Regulatory Commission, various banks annual reports, and the China Financial Development Report. Cross‐border management knowledge transfer from global banks to emerging economies is the theoretical framework for analyzing strategic investment in bank cases.

The paper finds that there are some successes of management knowledge transfer from such investment, although foreign strategic investment is limited as a minority share in each local bank. Culture shock came at the first stage and syncretism later on.

The cultural shock and rigidity of traditional conception are an impediment in the transfer process. This paper shows that the initial conflict can be avoided.

The purpose of this paper is to analyze the merits and disadvantages of the law of the People's Republic of China on anti‐money laundering.

The paper describes the main contents contained in the newly adopted law of the People's Republic of China on anti‐money laundering, celebrates the enactment of the law and points out the gap still remaining between Chinese legislation and international standards.

The enactment of the law of the People's Republic of China on anti‐money laundering is of vital significance. Based on the international experience in the fight against money laundering, Chinese anti‐money‐laundering legislation has made considerable progress. Its shortcomings, however, are also evident.

This paper presents a comprehensive description of, and comments on, the law of the People's Republic of China, which would be beneficial to the legislature.