From Martyn…
The biggest threats to China’s long-term growth are the insolvent, badly-run, poorly-regulated state banks whose employees have such notorious sticky-fingers. Just before the Royal Bank of Scotland unveiled its deal to buy a 10% share in the beleaguered Bank of China, the former chief executive of Bank of China’s Hong Kong operation, Liu Jinbao, was handed a death sentence for graft. And Hong Kong was one of the banks better-run branches.
Following the government’s recent injections of US$22.5 billion each in Bank of China and China Construction Bank and US$15 billion into Industrial and Commercial Bank of China to ease the massive burden of non-performing loans accrued through years of government-directed lending decisions and mismanagement, particularly during the lending frenzy of 2003, and with the banks facing the very real possibility of another collapse of the housing bubble which would see the banks lose billions, it’s heartening, nay encouraging to see the People’s Bank of China responding to these dangers and battling to become viable commercial entities by……organizing a nationwide English competition and exulting all employees to study Deng Xiaoping thought:
In what can only be good news for China-watchers who don’t speak Chinese, the central bank has taken time out from managing the yuan to organise an English competition for its 160,000 employees.
“We hope young comrades at the People’s Bank of China can use the English contest as a starting point, treasure time as gold, study hard and work diligently,” the Financial News quoted Vice-Governor Xiang Junbo as saying at the finals of the competition on Wednesday.
He also urged bank staff to study the theories of scientific development and of late paramount leader Deng Xiaoping.
I won’t keep you all in suspense. The three-month contest was won by the central bank branch in Jinan, capital of the eastern province of Shandong.
1
By Martyn
I just want to add that, in memory of one of the greatest ever China-related blogs to grace the blogasphere….this article was a feeble attempt to write in the unique style of the late, great Gweilo Diaries!
August 26, 2005 @ 1:08 am | Comment
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By Will
I have no frame of reference for that, it was before my time.
However I seem to recall this morning seeing an article about Temasek, Singapore’s state investment body, also sniffing around 10% of Bank of China. My tax dollars and retirement savings at work.
I bet you they’re not studying Deng Xiaoping theory.
August 26, 2005 @ 1:41 am | Comment
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By Martyn
It’s a shame you never got to see Gweilo Diaries Will. That’s how I first started reading the China blogs in 2002, when my HK mates told about the site. I also believe Simon from Simonworld decided to start blogging after he saw a load of his colleagues huddled around an office computer laughing and reading GD.
My HK mates still talk about Conrad’s notorious SMS text messages to this day.
August 26, 2005 @ 2:11 am | Comment
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By Thomas
Well, it sure is nice to see concrete plans to stave off disaster coming out of the Bank of China. Now if the worst does happen, they can gave their excuses in two languages.
I, for one, am relieved.
August 26, 2005 @ 3:41 am | Comment
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By Liuzhou Laowai
The English speakign competition was at Te People’s Bank of China, not The Bank of China. They are not the same thing!
August 26, 2005 @ 4:11 am | Comment
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By Budding Sinologist
Good call, Thomas!
Would all of the commenters here agree that the prime reason for widespread bank insolvency of Chinese banks is the state owned enterprises? I’m sure graft plays a role, but I don’t think you get that bad off because a manager is skiming .5% off the top (or however much the manager et al we taking).
August 26, 2005 @ 4:37 am | Comment
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By Martyn
The state owned enterprises and the politically-motivated (i.e. trying to maintain stability by keeping them afloat) lending decisions are a big factor I think meizhongtai.
Also, the appauling credit decisions are to blame. About 18 months ago there was that story in the Chinese press about one guy that managed to secure 132 morgage loans with false paperwork. I forget the amount of money he managed to winkle out of the state banks it was huge. What kind of system are they running where one man can have 132 morgage applications approved?
Graft is carried out by a relatively small actual nummber of people but the amounts are huge. Does everyone remember the BoC’s Kaiping Branch incident? I think the amount stolen by the manager and deputy bank manager was US$650 milion. I’ve been to Kaiping, it’s only a few miles away from Guangzhou. It’s a real trashy place, a totally forgettable little town. God knows how they managed to get away with that much cash.
August 26, 2005 @ 4:53 am | Comment
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By Thomas
Sorry Linzhou…my mistake. I typed too quickly.
August 26, 2005 @ 5:28 am | Comment
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By Liuzhou Laowai
Sorry about the typos in my earlier comment. Dodgy keyboard!
I hate to spoil the joke in the article, but the People’s Bank of China and the Bank of China are not the same.
The People’s Bank of China is not a high street bank. It is China’s financial regulatory body.
The Bank of China (a share of which the Royal Bank of Scotland has recently acquired) is the high street bank.
So while it would be “encouraging to see the Bank of China responding to these dangers and battling to become viable commercial entities by……organizing a nationwide English competition and exulting all employees to study Deng Xiaoping thought”, unfortunately it didn’t happen.
August 26, 2005 @ 5:38 am | Comment
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By Martyn
I think everyone knows the difference between the People’s Bank and the high street bank, don’t they? It’s doubful that the high street BoC would have a mere 160,000 employees. But sorry for the confusion in my write-up, the exerpt clearly states the “People’s” BoC.
August 26, 2005 @ 6:08 am | Comment
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By Martyn
Speaking of banks, I think everyone has their own banking in China anecdote. Imagethief’s Monthly Trip To Hell story is fairly typical I think. My own involves getting arrested in the Beijing headquarters but we’ll leave that for another day.
It does annoy the hell out of me though when my local branch (in a 5-star hotel) has two tellers operating while 50+ disgruntled customers gaze upon dozens of bank staff laughing and chatting behind the counter, going to the toilet in groups of four etc.
Also, what do some people do in banks that takes 45 minutes? I don’t think I’ve ever spent 45 mins being served in a bank before but most of the people in front of me do. One of life’s mysteries I suppose.
August 26, 2005 @ 6:23 am | Comment
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By Martyn
Eric, the difference between the name of the two banks is one word, ‘People’s’, which I did not type in the article. If missing one word means “clearly states” to you then there’s not much I can do about it. The exerpt does mention the correct name of the bank and, as I just said above, I’m sorry for the typo.
August 26, 2005 @ 6:36 am | Comment
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By Logan
If anything, it’s probably more interesting that it’s the PBOC that’s being asked to learn English, but study Deng Xiaoping theory, exactly at the time when the rest of the world believes that China’s central bank is capable of conducting rational management of monetary policy and resisting speculative influences on the currency. Good to know the priorities are still completely out of whack. At the same time, you see this sort of thing written about what goes on in Chinese organizations all the time; from what I understand, it leads to a few seminar sessions that annoy the employees and then standard operating procedures resume.
August 26, 2005 @ 7:00 am | Comment
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By Liuzhou Laowai
Having to study Deng Xiao Ping Theory is not at all unusual in China. Every university students has to, no matter what their major.
Also, to enter a master’s or doctorate programme, an exam pass is required.
Everyone knows it is nonsense, but…
August 26, 2005 @ 7:10 am | Comment
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By Martyn
Agreed Logan. In the case of the BoC-RBS, I also think it’s definitely a case of caveat emptor. What do you think they’re going get for their money except a foot-hold in the industry?
August 26, 2005 @ 7:28 am | Comment
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By shulan
As this seems to be the day of nice banking stories, here is mine:
I once wanted to change a traveler chec at the BOC. After I had given my signature several times because the clerk wasn’t satisfied with it and after it had gone through the hands of 5 people beeing checked and double checked they gave me RMB worth 100 dollars. Unfourtunatly it was a 50 dollar traveller chec. That’s what I call efficiency. To bad I’m such a honest person and told them about their mistake, but then, the expression on the first clerks face (the signature fetishist) was worth it.
August 26, 2005 @ 8:26 am | Comment
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By Filthy Stinking No.9
I heard an interesting theory today. Perhaps buying into the Chinese banks is simply a form of bribe on a scale far more massive than those discussed here. The cost of gaining access to the Chinese insurance and pension market may well be a few billion to keep the Chinese banks chugging along …
August 26, 2005 @ 8:58 am | Comment
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By Filthy Stinking No.9
And Gweilo Diaries was indeed a classic. I was also a fan of the SMS texts …
August 26, 2005 @ 8:59 am | Comment
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By Liuzhou Laowai
It isn’t only Chinese banks or financial institutions which rip off their customers, you know. Or Chinese bank staff which rip off their employers aand ultimately customers.
Need I mention Barings, Yamaichi Bank, BCCI and many more. Just today there was the story of the Japanese bank employee who has syphoned off $9 million.
August 26, 2005 @ 9:38 am | Comment
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By Martyn
LL, you’re correct but I think the corruption involved with Chinese banks is probably a bit more widespread than the incidents you mention. Not just the managers etc openly stealing funds and then fleeing but all sorts of general back-scratching and dodgy-dealings.
August 26, 2005 @ 10:04 am | Comment
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By KLS
FS9, there are certainly stories around of foreign banks with no investment banking expertise or experience in mainland china buying a stake in a bank and then getting chunky fee business from said bank…
August 26, 2005 @ 12:21 pm | Comment
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By Sam_S
Also, what do some people do in banks that takes 45 minutes? I don’t think I’ve ever spent 45 mins being served in a bank
I don’t know, but I’ve been puzzling over this for a while. I suspect it’s the same thing they’re doing when they take 15 minutes to order a No. 3 meal plus ice-cream cone at McDonald’s. I want to bring a translator to listen in next time, just to see exactly is being discussed and negotiated in these transactions.
August 27, 2005 @ 8:03 am | Comment
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By Martyn
Sam, it’s normally really mundane and basic questions that they chat about. Things like, “Does the cheesburger have cheese in it?” “How much extra to supersize?” Can I replace the Coke with an orange juice”.
Like, really obvious questions. Most of the answers can be found by looking at the price list but, here in China, there’s a big tendency among some people to ask the most obvious of questions rather than try and find the answers themselves.
That’s what I find anyways.
August 28, 2005 @ 2:46 am | Comment
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By Other Lisa
Well, I think it’s also kind of the way people interact – I’ve noticed when I go out to restaurants with Chinese friends that my friend doing the ordering will always talk things over very thoroughly with the waitress – because there is a lot of potential variety within any particular named dish, I suppose. I think maybe people in China haven’t gotten used to the whole “fast food” concept – where everything is absolutely standardized, and a Big Mac has one, set definition.
Not that getting used to fast food is such a good thing, IMO…
August 28, 2005 @ 11:55 am | Comment
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By Gaby
Just to say hellow!
September 16, 2005 @ 6:57 am | Comment