A Chinese central bank vice-governor noted Thursday the vital reform of state-owned banks will not postpone despite scandals in recent years including a Bank of China (BOC) fraud case that reportedly involve as much as US$1 billion.
"The reform will be advanced as scheduled," Guo Shuqing, also amember of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said in an interview with Xinhua on the sidelines of the top advisory's annual session.
The head of the BOC's Hesongjie sub-branch in Harbin, capital of China's northernmost Heilongjiang province, embezzled a hefty amount of deposits from a local highway company and then disappeared in January this year.
"The BOC runs fairly well, but its supervision over operations at grass-root level branches are not in place," said Qin Chijiang, deputy secretary-general of the China Financial Association.
Some people capitalized on the "weak links" in banking reform to commit crimes and pursue their own interests, acknowledged Qin, a deputy to the National People's Congress, China's top legislature.
China initiated the latest, ambitious reform on the financial system at the end of 2003 when the central government injected a combined 45 billion US dollars into the BOC and CCB to help boost their capital base.
They have both become joint-stock banks and are negotiating with potential strategic investors, who will acquire their shares and help streamline their operation. The BOC and CCB are both aiming for stock market debuts.
It is "astonishing" to see the fraud case happen on the BOC, a bellwether on the reform, Guo Shuqing said.
In some sense the case is not a "bad thing", however, he said. "The uncovering of the BOC case shows directly that the banking reform has made certain achievements. The progress of reform has made scandals unable to hide anywhere."
He noted pilot reform of Bank of China (BOC) and China Construction Bank (CCB) had been "basically smooth" over the past year. "The progress is fruitful and in line with our expectations."
Governor Zhou Xiaochuan of the People's Bank of China, or the central bank disclosed earlier that stock market listings are "not far away" for the BOC and CCB.
He said the Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC), the other two state banks, would also push on the joint-stock reform by taking advantage of experience from the BOC and CCB.
But Zhou did not reveal how much the central government would into the ICBC and ABC and where the funds would come from.
(Xinhua News Agency March 10, 2005)
