The Formation of the Chinese Banking System and Its Current StateInin Lyu
The article deals with the formation of the Chinese banking system and its current state. The subject of the research is the Chinese banking system and its current state. The methodology of the research includes monographic, vertical and horizontal analysis. As a result of the research the genesis of the formation of the Chinese banking system was considered, the departments of the People’s Bank of China were designated and its functions were studied. The regulation of the People’s Bank of China is carried out by the law called “On the People’s Bank of China” and adopted on March 18, 1995. The latest changes were adopted on 12/27/2003. The list and the main stages of the development of joint-stock Chinese commercial banks were presented. The main requirements for foreign banks and the share of Chinese banks in the capital of foreign financial institutions were considered. The guidance of the People’s Bank of China is fulfilled by the manager and his deputies, who are appointed or removed from their post by the chairman of the PRC. Today, the People’s Bank of China performs two main functions: regulating the financial sector and conducting the monetary policy. The basis of the banking sector are large commercial banks. In 2003, the Standing Committee of the All-China Assembly of People’s Representatives adopted a row of amendments to the law, according to which the People’s Bank of China received a number of additional powers to ensure the overall financial stability and to conduct the country's monetary policy. Foreign currency transactions dominate in the activity of the People’s Bank of China. Chinese commercial banks are divided into two types: four banks with the state capital (“Big Four”) and joint-stock banks. The four largest banks with the state capital are: the Bank of China, the Agricultural Bank of China, the Commercial and Industrial Bank of China, and the Construction Bank of China. The aggregate amount of their assets was 53% of the total assets of the Chinese banking system in 2005. The country rating is determined by international agencies. The rating of China in the long term, both in the national and in the foreign currency is “A”.