Bank of China hopes to open new opportunities, grow assets

Global Business

China’s banking system is now the biggest in the world, new analysis has shown. A recent estimate shows the country’s banks now have more assets than those of the Eurozone.

A flood of fiscal stimulus has helped Beijing with its economic slowdown.

CGTN’s Nathan King met with a former executive at Bank of China Shanghai.

Bank of China hopes to open new opportunities, grow assets

Bank of China hopes to open new opportunities, grow assets

China’s banking system is now the biggest in the world, new analysis has shown. A recent estimate shows the country’s banks now have more assets than those of the Eurozone. A flood of fiscal stimulus has helped Beijing with its economic slowdown. CGTN’s Nathan King met with a former executive at Bank of China Shanghai.
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Completed in 1937, the Bank of China building has the art deco style of the age, but mythical lions guard its entrance and a relief with Confucius hovers above it.

Li Qing, a former executive at bank of China Shanghai, is now its history consultant, explains the main differences between China’s banking system and the West.

“Chinese people love to save money. They had to save money for unforeseen risks in the future, for example, for sickness, or other major expenses. They are now used to the lifestyle of saving every extra cent-even if they are now much wealthier, which always protects them from future risks and uncertainties. That is why I think it is a good thing,” Li said.

But what about all the loans Chinese banks have made to fund development projects? Could they go bad as the economy slows?

“If there’s any problem with China’s financial capital, according to my personal experience, it is probably not because of common people’s consumption. Instead, it is the loans we give to the companies or enterprises, especially if there’s fraudulent accounting statement. That will eventually lead to a relatively big run on the banks. But China has a very powerful central government, which will coordinate actions and relations between banks and enterprises. If there’s a problem, let’s tackle it together. This is what I have been through with most cases. If there’s anything wrong with a company’s accounting, us banks will help them with it.”

Mr. Li said Chinese state ownership of the banks as a good thing-a way to avoid a global financial meltdown like the 2008 credit crisis-triggered by U.S. banks.