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Banks And Trusts Going In Different Directions
In industrial policy, governments attempt to promote the strong while
sacrificing the weak. In the case of China's financial sector that
would require a great deal of sacrifice, so Beijing must use a
different strategy. It has adopted company titles as the criterion:
financial institutions calling themselves ‘bank' are supported while
those called ‘trust' are sacrificed.
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The four state banks were favored yesterday with the lifting of
controls on their foreign currency lending rates, allowing them to
compete more effectively with foreign banks. Smaller commercial banks
have been encouraged in their restructuring efforts by greater access
to capital and the lifting of operational restrictions. The welcome
result is that Moody's has raised the outlook from negative to stable
for seven institutions, including Everbright and Merchants.
Meanwhile, a trust folds up its tents almost every week; this week
it's the Education, Science, and Technology Trust. Nearly 200 such
firms are to be shut down by the end of 2001, while not even the
tiniest bank is slated for closure. There is now a great deal of
overlap between the functions of banks and trusts and inefficiency is
generic to the industry. But one group lives and the other dies.
What's in a name, anyway?
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China
E-Bytes
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| A single foreign company can now assume a 10 percent stake in
domestic insurance firms, up from five percent. Insurance premiums
grew only modestly in the first half, up 6.7 percent to $9.6 billion,
after double-digit growth in 1999. |
| Official sources say Baosteel still plans a $1 billion listing in
New York and Hong Kong this year. That would sandwich it in between
oil giants Sinopec and CNOOC. |
| A report funded by Coca-Cola indicates that investment by the
company created jobs for 30 times more workers than Coke employs directly. |
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| Keep
up with the fast changing business environment in
China, the world's biggest and fastest-growing emerging
economy. Sinomania! recommends Orbis
Publications, Experts in Emerging Markets, for
a full range of in-depth coverage on China including
daily/weekly/monthly reports and more. |
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