Documentation Brochure - Hamburg Summit

Banking and Finance in China
Heinz Dollberg, Allianz Versicherungs-AG Ulrich W. Ellerbeck, HSH Nordbank AG Margot Schüller, GIGA - Institute of Asian Affairs Jin Yun, Shanghai Pudong Development Bank
The financial sector is the heart of the
economy,” said Jin Yun, Chairman of
the Shanghai Pudong Development
Bank. Because growth was unlikely to
lose momentum in the years ahead the
sector was sure to play a much larger
role in the future than it does today. Jin
described three conditions that had to
be fulfilled to ensure that it does. “We
must open the door, we must broaden
the open areas and, compared with
years ago, our steps must be bigger.”
In principle, he said, there can be no
doubt on these points, “but we feel that
finance is very sensitive.” The opening
of the financial sector must not proceed
at a faster pace than the development
of the economy. Otherwise restrictions
would be inevitable, with unforeseeable
consequences for the economy. “If you
look at international financial institutions,”
Jin said, “they took a long time to
develop.”
The greatest uncertainty Chinese
banks face continues to be non-performing
loans. Rainer Schäfer, head of
country risk and emerging market
research at Dresdner Bank, said: “The
government has done a lot to recapitalise
Chinese banks, bring down
the ratio and improve controlling, but
there can be no doubt that a big black
hole still exists.” Heinz Dollberg, head of
the Asia Pacific division at Allianz
Versicherungs-AG agreed: “The capital
market is the bottleneck.” And Ulrich
W. Ellerbeck, Member of the Management
Board of HSH Nordbank in
Hamburg, also promised that “many
years will elapse before we see a really
free market in China.”
So why is the HSH Bank already
committed in the country if Ellerbeck is
convinced that in view of the size of the
market all foreign banks are just niche
players “We have to follow our
customers and we have to protect
them,” he said. Given the size of the
market, he added, being represented in
it would seem to be a must. “Investing
in the Chinese market is investing in the
future,” Ellerbeck and his colleagues
agreed calling unanimously for further
liberalisation of the market. Competition
is still rudimentary, as Dollberg
made clear by means of a small example.
In all of China a total of 36 insurance
companies are now in business.
And how many compete in the German
market “More than 1.500,” Dollberg
said. Jin Yun added: “As Chinese banks
we are already feeling the pressure of
competition. We have to learn how to
compete with you, we still have a way
to go before we reach international
standard.” To do so, many innovationsremain
to be implemented. Management
skills must be improved, Chinese
banks must learn to handle risks and
they must, above all, look after their
customers much more effectively.
“The key of all keys,” Jin Yun was
firmly convinced, “is to train talents,
and the key to training talents is to
change mentality.”