China Construction Bank Of China

2117 Words9 Pages
With an average of 9.3% annual GDP growth, China has become the world’s largest and most powerful emerging economy (Shan, YG & Xu, L 2012, p.115). China has a bank-based economy, which signposts that the banking system in the country controls the majority of its economic resources. Before the late 1970s, the banking sector in China was controlled by a monopoly bank - the People’s Bank of China (PBC) (Sáez, L 2001, p.237). The gradual reforms in the industry since then separated several duties and functions from the PBC, which resulted in a number of industry-specific commercial banks: the Bank of China (BOC), the Industrial and Commercial Bank of China (ICBC), the China Construction Bank (CCB) and the Agricultural Bank of
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It has experienced fast growth since the open door policy in 1978, especially over the past decade. According to Turner, G & Tan, N & Sadeghian, D (2012, p.53), the total assets in the banking system (including assets in Chinese banks’ foreign branches and subsidiaries) was around 240% of GDP at the end of 2011, a substantial increase from about 200% in the early 2000s. The growth is mainly attributed to an increasing domestic demand for banking services and activities associated with economic development. As a result, China did not suffer severely from the 2008-2009 global financial crisis. The top five banks in China by size, the big four mentioned previously and the Bank of Communications (BCOM), control around half of Chinese banking system assets and deposits (Turner, G & Tan, N & Sadeghian, D 2012, p.53). The ‘Big Five’ also account for nearly 50% market share in the banking industry. These leading banks are mostly state-owned and partially privatised through listing on the Hong Kong stock exchange (Turner, G & Tan, N & Sadeghian, D 2012, p.53). Compared with the stock markets, the banking system in China has considerably greater importance due to its size (Allen, F, Qian, J & Qian, M 2005, p.70) and the structure of its economy. However, the stock markets in China are considered to be comparatively more efficient than the banking system within the country
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