The Study On The Development Of Private Banks In Zhejiang

The sixteenth Central Committee of the Communist Party of China put forward that we must encourage,support and lead the development of non-public economy firmly. With the support of our Party's and country's policy, the economic bodies of our country are more and more diversified. Private economy has taken an important part in the development of national economy and made a great contribution to the development of society and economy. With the development of private economy, private enterprises developed rapidly and have been a main force of the economic body. However, private enterprises, especially small and medium-sized private enterprises have much difficulty in financing. As the economic bodies of our country are diversified, the financial bodies should also change. We should construct a diversified financial system, including national state-owned banks which serve large-sized state-owned enterprises and local private banks which serve small and medium-sized private enterprises.Fan Gang, the scholar of our country, put forward that financial reform must develop private financial institutions in 1993. The Great Wall Financial Research Institute was founded in July2000. This roused a strong voice of setting up private banks. In practice, the development of private banks is not satisfying. However, noted that in Zhejiang whose private economy is quite developed, the development of private banks is in good condition. Now Zhejiang has one national private bank and three local private banks. Therefore, reviewing the development of private banks in Zhejiang and finding out the reasons why they developed so rapidly has important operation significance to the further development of private banks in our country.This paper reviews and studies the development of private banks in Zhejiang in combination with the development of private economy, finds out the experience and shortages in the development of private banks, and put forward improvement measures, in order to get a positive and objective evaluation to the development of private banks in Zhejiang. This paper is divided into four chapters. The main contents and opinions are as follows:Chapter one describes the general situation of the development of private banks in our country. Firstly, the author defines private bank. The domestic academe hasn't form a uniform opinion on the concept of the private bank. There are three representational opinions, namely property right structure theory, assets structure theory and corporate governance structure theory. These three definitions describe the characteristics of private bank from three different aspects,but don't form an overall understanding to the essential characteristics of private bank. The definition of private bank in this paper is as follows: Private bank is a modern joint-equity commercial bank which is controlled interest by folk capital, owns clear property right structure, operates under market principals and mainly serves small and medium-sized private enterprises. Secondly, the author describes the necessity and feasibility of developing private banks. We need to break the situation of monopoly in banking, to solve the financing difficulties of small and medium-sized private enterprises, to promote the normative development of folk finance, and to improve the diversified financial system. Developing private banks will help us solve all these problems. Three are no obstacles in law and policy for developing private banks. It's also feasible in reality. At last, the author introduces the development of private banks in our country. Our country has gained some achievement in developing private banks at present. However, it doesn't accommodate with the development of private economy. Private banks develop quickly in Zhejiang.Chapter two introduces the development of private banks in Zhejiang. This chapter focuses on the development of Zheshang Bank and Taizhou City Commercial Bank, describes the features in their development and the comparative advantages of private banks in Zhejiang. China Zheshang Bank has made wonderful achievement since its foundation. It has formed its own features in stock equity structure, managerial ideas, development strategy, corporate governance structure, control of affiliated dealings, market orientation, management of risk and so on. Taizhou City Commercial Bank has obtained good accomplishment since its foundation. It has privately-owned property right structure, particular way of organization, specific market orientation, adequate stimulation and restriction and particular management of credit. These two banks have comparative advantages in property right structure, information, operation efficiency and management system. These advantages ensure that two banks operate in good condition.Chapter three describes the external condition and experience of the development of private banks in Zhejiang. The private economy of Zhejiang developed quickly after reform and opening-up. The rapid development of private economy created good conditions for the development of private banks. Through reviewing the development of private banks in Zhejiang, this paper educes some experience for other areas to use for reference.Chapter four analyzes the shortages in the development of private banks in Zhejiang and puts forward improvement measures. Although the private banks in Zhejiang develop quicker than other provinces, there are still many shortages in their development. Firstly, the number of private banks in Zhejiang is limited and its competition ability is not high enough. Secondly, there are also some shortages in the single private bank. In allusion to the shortages existed in the development of private banks in Zhejiang, this paper puts forward some improvement measures to facilitate the further development of private banks in Zhejiang.The innovation of this paper lies in that it studies the issue of private bank from a new visual angle. It chooses Zhejiang whose private banks develop rapidly as the object of study. This is not involved in the current study of private banks. The shortage of this paper lies in that the theoretics is not enough and it studies the issue in a practical angel. The depth of this paper is not enough. Because of difficulties in data collection, the data used in this paper are not the newest.