What a world, when the premier of China sounds like Andrew Jackson and Teddy Roosevelt. His observations of the problems they face with the biggest banks in China must surely resonate with people in the developed nations.
I do not know how to translate this into Chinese, but the Premier is free to use it in his speeches:
"The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery."I found the rather dismissive reaction from some of the 'Big Four' Chinese banks to be very interesting.
"Wen has one year left (in his term)," said a Chinese state banker who asked not to be identified because of the sensitivity of the topic. "This is a task for the next generation of leaders. It cannot be accomplished within one year."Perhaps they feel that they have bought this reformer and made him their puppet, a faux reformer, in the manner of their Western counterparts.
As forecast more than seven years ago, before the financial collapse which was also in the same forecast, the monied interests will keep pressing their advantage around the world, blinded by greed and emboldened by their apparent victories, until they go too far and destroy themselves.
AP
China's premier calls for breaking bank monopolies
By JOE McDONALD
4 April 2012
BEIJING (AP) — Premier Wen Jiabao, China's top economic official, says its state-owned banks are monopolies that must be broken up, acknowledging mounting economic and political pressure to reform an industry whose vast profits are fueling public anger.
Wen's comments Tuesday suggest Beijing sees a growing political danger from its failure to carry out long-promised reforms of state banks, which pay minimal interest on deposits and made tens of billions of dollars in profit last year. Public resentment has risen as China's rapid economic growth slows and fears of job losses rise.
Speaking Tuesday to businesspeople, Wen said Beijing has launched reforms aimed at serving entrepreneurs better by opening up banking to private investors, China National Radio reported. It gave no indication of a possible timeline for further reforms.
"Our banks make money too easily. Why? Because a small number of big banks have monopoly status," Wen said, according to a transcript on the CNR website. "To allow private capital to flow into finance, basically, we need to break the monopoly."
Wen spoke during a visit to Fujian province in the southeast, a center for export-driven private enterprise. The government announced last week it will launch a pilot project to expand private lending in Wenzhou in neighboring Zhejiang province after a wave of defaults on underground lending that supported businesses there.
"I think those elements in Wenzhou that succeed need to be expanded nationwide and can immediately be introduced nationwide," Wen said, according to the transcript.
Communist leaders have long used Chinese banks to subsidize state industry, shifting wealth from savers to politically favored companies. Entrepreneurs produce most of China's new jobs and wealth but get only a small percentage of bank loans.
That has fueled resentment, especially as the "big four" major state-owned commercial banks, which account for about half of deposits, report record profits...
Read the rest here.
Reuters
What does China's Wen mean when he says break bank monopoly?
By Benjamin Lim, Terril Yue Jones and Langi Chiang
Apr 4, 2012
(Reuters) - When Chinese Premier Wen Jiabao talks about busting a bank monopoly, he may be thinking of modest financial reforms, not a dismantling of the Big Four state-owned banks.
His comments on Tuesday were blunt: the big banks reap profits "far too easily" and operate like a monopoly that needs to be broken in order to speed the flow of money to loan-hungry smaller businesses.
Reuters contacted five of China's largest banks to see how Wen's remarks were received. There was little concern that a major policy shift was imminent, especially when the Communist Party is only months away from a once-a-decade power handover, which includes replacing Wen.
"Wen has one year left (in his term)," said a Chinese state banker who asked not to be identified because of the sensitivity of the topic. "This is a task for the next generation of leaders. It cannot be accomplished within one year."
The Big Four banks, Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank, account for about 40 percent of China's total loans.
They have come under criticism for earning fat profits while small businesses scramble for financing.
Last year, the top four banks earned net profits totaling $99 billion, more than double at their U.S. equivalent - Citibank, J.P. Morgan Chase, Bank of America Merrill Lynch and Wells Fargo.
The large banks tend to direct most of their lending toward fellow state-owned enterprises, but China increasingly relies on smaller private firms for job creation and economic growth.
The big banks wield formidable political power. Top executives are appointed by the Communist Party's Organization Department and hold a rank equivalent to a cabinet vice-minister..."
Read the rest here.
