A Study On The Reform Of Policy Banks In China

Before 1994, four state-owned specialized banks not only operate commercial banking business, but also business of Policy banks. They execute national policy directives, provide loans for Industries which are supported and developed importantly, but this business model increasingly no more suited to the situation of economic development. So in 1994, our country has set up China Development Bank, The Export-Import Bank of China, and Agricultural Development Bank of China. Since then, these three policy banks start to operate policy-related business which is separated from four state-owned specialized banks. Over the past decade, the three policy banks have achieved good results in support of basic industries, emerging industries, and weak industrial development, as well as import and export of electromechanical products and the promotion of rural economic development. When the initial objectives of establishment are completed, the sustainable development of policy bank is gradually put on the agenda. Then, China Development Bank firstly carried out its commercial reform, this article analyzes the reform process and results.About The Export-Import Bank of China and China Agricultural Development Bank is to conduct reform, and how to achieve reform, are also analyzed, hoping to make some useful comments and suggestions.This article includes five parts:The first part introduced the research background and significance of the article, introduced the development of China's history of policy banks, and domestic and foreign reform of policy banks ,and the research results are summarized. Foreign countries began earlier, and many Japanese scholars have studied this issue. Domestic scholars, mainly study the positioning of policy banks, their sustainable development, and how to handle the coordination and development with commercial banks and other different aspects.The second part described the nature, functions by comparing with the commercial banks, and then introduced the existing policy banking system, about their development since their establishment, analyzed problems existing in the development of policy banks and the reason for these problems. Finally, explained the need for reform about policy banks of our country, and the positioning of The Export-Import Bank of China, and Agricultural Development Bank of China.The third part showed the domestic and foreign policy bank reform cases, including KDB,JDB and KFW, as well as China Development Bank. Their reform measures, and the valuable experience we can learn from them.The fourth part proposed recommendations about the reform of China's policy banks, the policy proposals are the following: The market-oriented financing, expand financing channels; establish a strict risk prevention mechanism; proper coordination of policy banks and commercial banking relationships; sound internal control system, the strengthening of external control; seek for their own development approach to reform.The fifth part is the conclusion, indicate that policy bank reform is of great significance for China's financial reform and economic development, noting that the reform of policy banks is a long process to choose their own development in line with China's national conditions and approach to reform. It is necessary to achieve their own development, but also to promote the diversification of financial markets.