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History, Status Quo and Development Plan of Finance of Nanchang
 

History, Status Quo and Development Plan of Finance of Nanchang


I. History
Nanchang, an inland city in mid-China, witnessed a slow financial growth in the past, which could be seen in three areas. Firstly, it was small in volume. Banks in the city had a deposit balance in total of 1.79 million yuan and a loan balance of 180,000 yuan in 1949 and the figures just increased to 275 million yuan and 922 million yuan respectively in 1978. Secondly, it was small in the number of financial institutions. At an early stage of reform and opening-up policy being carried out, there were only less than 10 financial institutions in the city, namely People’s Bank, ICBC, ABC, BOC and CCB. Lastly, there were few financial products available. Citizens could only make deposits with a bank or buy treasury bonds when they wanted to manage their money in a few years after 1978.
II. Status Quo
The city has seen a booming financial sector and great progress in building up a modern financial center in recent years.
1. Growing volume and good performance of financial institutions. By the end of December, 2008, the savings deposit in RMB and foreign currencies in all financial institutions of the city totaled 249.996 billion yuan, up 43.704 billion yuan than the early that year, and loans in RMB and foreign currencies reached 215.532 billion yuan with an increase of 33.512 billion yuan. The whole year profit reached 6.084 billion yuan. All insurance organizations in the city gained premium revenues of 4.263 billion yuan in 2008 with a 74% increase year on year.
2. Increasing improvement in the financial system and an emerging role as a financial center in the district. So far, the city has more than 100 financial institutions of which 17 are banks, 25 are insurance companies, 2 are security companies, 37 are guarantee companies, 1 accounting company and 2 venture investment companies. Two foreign banks, Standard Chartered and Dah Sing, and China Minsheng Banking Corporation have already established branches in Nanchang. More from home and abroad, such as China Everbright Bank and Northeast Securities, have begun to focus their attention on the city. Nanchang has started to accommodate financial institutions of all kinds as a financial center in the district.
3. Financial reform deepening and local financial companies growing. Nanchang Bank successfully changed its name and operated in multiple areas. It officially changed its name on Sept.29, 2008 and began operation in another area by launching the Pingxiang Branch for business on Dec.29, 2008. Nanchang Hongdu Credit Cooperative is being transformed into a rural commercial bank and will be incorporated soon. It is going well with establishment of new financial institutions. The Nanchang CSMI Venture Investment (fund) Company, co-founded by the city and China Science & Merchants Investment (fund)Management Co., has started fund offering. The New Century Venture Investment Company invested by the municipal government has opened for business. Jiangxi Credit Guarantee Company and Nanchang branch were incorporated. Steady progress was made in share capital increases in private guarantee companies. Pilot work has been launched at village- and town-based banks as well as small loan companies.
4. Increasingly abundant financial products and better service provided by financial institutions. While sustaining a self-growth nowadays, banks are putting people first by providing more financial innovations for citizens to preserve and increase their property in value and meeting customized needs. People in Nanchang can make a comprehensive selection of financial products including interest rate, gold and funds. With rapid growth of economy and IT technologies widely applied in practice, banks are providing better and better service, such as self-banking, online banking and telephone banking, which has enabled customers to deal with different transactions at home. In short, the financial service is getting better and more professional, and convenient.
III. Focal Points in Development Plan
Our financial development plan is outlined as follows:
1. Added value of financial sector by 2010 should reach about 10 billion yuan with a year-on-year increase of 16%, account for 12% of that of the service sector and for 5% of the city GDP. By 2020, it’s expected to account for 10% of GDP of Nanchang.
2. A reasonable, competitive and efficient banking system with policy banks, state-owned banks, share-holding banks, local financial institutions and foreign banks should be established. By 2010, three new banks should be located in Nanchang. The deposits savings in RMB and foreign currencies in all banks should surpass 300 billion yuan and loans about 280 billion yuan with a yearly increase of 16.5% and 18.5% respectively by then. These two figures should top 1 trillion yuan and reach about 800 billion yuan respectively by 2020.
3. A modern, open and orderly insurance market system should be built up where there are multiple players like state-owned insurance companies, foreign-owned and Sino-foreign owned companies and intermediaries who can make differentiated competition. One or two insurance companies with a legal person should be established. By 2010, five more insurance companies should be located in Nanchang. The sector is expected to have a revenue over 4 billion yuan with 18% increase year on year and reach 2% in insurance depth with 800 yuan of premium per person. By 2020, the insurance industry should earn over 15 billion yuan.
4. A security system should be built with abundant kinds including shares, bonds and funds and well developed securities organizations. Bonds and shares markets should grow in balance. Local enterprises listing should find it easy to expand direct financing by listing at home or abroad to. A great increase should be seen in domestic securities financing and financing from international capital market. It’s planned that there be one or two more listing companies by 2010 and be over 40 such companies by 2020.
5. Trust and other financial segments should be well standardized and regulated, reasonable in market layers, flexible in business development and bigger in size. A financial intermediary system should be built with all kinds of intermediaries in place, various intermediary businesses and good regulation. Specifically, financial accounting, laws, assessment, securities investment consulting should be highly efficient and well developed. The investment banking industry should be in good shape. Emerging intermediary business, such as risk investment, credit investigation and rating should witness a rapid growth.