Policy bank

In this article we will explore in detail the topic of Policy bank, which has aroused great interest in various spheres of society. Since its emergence, Policy bank has generated debate and interest due to its impact in different areas. Throughout history, Policy bank has played a crucial role in the evolution of different aspects of society, affecting both individual and collective levels. In this article, we will delve into the importance of Policy bank, its influence today, and its possible future implications. Through an exhaustive analysis, we will seek to provide a comprehensive view of Policy bank, addressing various angles and perspectives to understand its relevance in the current context.

Policy bank (政策性银行), or policy lender, refers to non-profit professional financial institutions established by the Chinese government with the goal of implementing the government's economic policies and carrying out financial business in specific fields. This measure separates policy finance from commercial finance and establishes a policy bank to undertake strictly defined policy businesses. Policy banks' sources of funds mainly rely on issuing financial bonds or borrowing from the central bank, and generally do not accept deposits from the public.

There are three policy banks in China: the Export–Import Bank of China, the Agricultural Development Bank of China, and the China Development Bank. All the policy banks are under the State Council.

Each of the two is dedicated to a specific lending purpose. ADBC provides funds for agricultural development projects in rural areas and Exim Bank of China specializes in trade financing, investment and international economic cooperation. The CDB specializes in financing of infrastructure, energy and transportation.

Development

In 1993, Zhu Rongji gave a speech in his capacity as governor of the People's Bank of China which helped serve as the basis for the subsequent development of China's policy banks.: 47  Zhu explained his view of how China's financial system should be structured, stating that the state "must establish a system of financial institutions, under the supervision of the central bank, principally consisting of national policy banks and state-owned commercial banks, but that encompasses a variety of financial institutions": 47  His proposed institutions included an export-import bank, a national interbank lending system, a short-term paper market, and an renminbi exchange rate mechanism based on the market rate.: 47  As researcher Zongyuan Zoe Liu writes, "The Party's contemporary economic power and financial influence are based substantially upon the institutions that Zhu envisioned in 1993, Fifteen years later, in 2008, China's policy banks and sovereign funds emerged on the global financial scene as some of the world's largest institutional investors, wielding significant influence over financial markets and projecting the Party's power abroad.": 47 

In 2015, China used its foreign exchange reserves to recapitalize China Development Bank and the Export-Import Bank of China.: 70  This in turn empowered those policy banks to make significant loans in Eurasia, Latin America, Africa, and the Middle East.: 70 

See also

References

  1. ^ "China's policy bank lends 859b yuan for rural infrastructure in 2017". gov.cn.
  2. ^ "政策性银行概述". People's Bank of China. Retrieved 2024-04-04.
  3. ^ "Policy Banks Industry in China". IBIS World.
  4. ^ "Introduction". The Export-Import Bank of China. Archived from the original on 2019-05-12. Retrieved 2018-12-05.
  5. ^ a b c d e f Liu, Zongyuan Zoe (2023). Sovereign Funds: How the Communist Party of China Finances its Global Ambitions. The Belknap Press of Harvard University Press. doi:10.2307/jj.2915805. ISBN 9780674271913. JSTOR jj.2915805.
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