China's Policy Banks, The Legal Regulation

In 1994, the government of China established three policy-oriented banks, namely China development bank, China export-import bank, China agriculture development bank. The aim was to lead society investment and to optimize resource ordonnance. So in the first time our country came into being new frame of finance system. In the new frame, the central bank controlled "macro-balance", the commercial banks pursued "economic benefit" and the policy-oriented banks carried through "structural adjustment". But because of no law to be following, the policy-oriented banks could do nothing but operate step by step, so it incurred a good many censures. There was no other than five schemes in the face of the policy-oriented banks. The first was to constitute law actively, to standardize action, to deepen reform and to train internal work. The second was that the three policy-oriented banks competed each other, incorporating one bank step by step. The third was the government canceled policy restrict, developed freely, and transformed into commercial bank. The forth was it combined with other state-owned commercial bank, melting into commercial bank. The last method was canceled them step by step, finished history mission. Nowadays, it was either impossibly or realistically to cancel three policy-oriented banks. At the same time the government wasn't permit them transformation or combination. The key question was that the policy-oriented banks needed regulated by law.We must obtain consistent opinions on policy-oriented bank. The policy-oriented bank should embody the government economic policy, operate on the way of "provide a loan to the one who needed it, and take it back on schedule", but their aims wasn't get profit, or permit to compete with commercial banks. The policy-oriented bank was one kind of special corporation, the commercial bank law can't apply to them, so it was needed enact law independently, the policy-oriented bank should run on the way of law. Nowadays, three policy-oriented banks have the motivation to get profit, and operating towards the direction to commercial bank, so they didn't want it embodiedin the law, such as the aim not getting profit, the tenet not competing with commercial banks, the operation getting strictly restriction. As a result, it needed China people's congress organizing experts, hearing of related departments' opinions, enacting law independently.In that way, it naturally was a difficult problem for the three policy-oriented banks that they should adjust their function and operate on the criterion, and the methods of regulating by law will be the key to solve the problem. By the end of 2003, the capital of the three policy-oriented banks had 2,124,700,000,000 yuan, the ratio was 7.7 percent, and the debt was 2,029,050,000,000 yuan, the ratio was 7.6 percent. From the gross and proportion of policy-oriented bank's asset and debt, it must be regulating by law, operating on the criterion. The prime aim was to protect their developing healthily, promote the perfection of financial system and the stable operation of country economy. On base of country macroeconomic and industrial policy, the object of legislation was to transform the policy-oriented bank into the policy financial organization which have integrated organization, unambiguous operation goal, scientific management structure, favorable assets status, normative operation management, right inner control, advanced management means, and owned strong policy executive ability.