After the Asian financial crisis China's banking industry went through several rounds of major reforms, and the Bank of China, China Construction Bank and the Industrial and Commercial Bank of China also conducted capital regrouping recently, said Zhou Xiaochuan, central bank governor at the FORTUNE Global Forum in Beijing, May 17. About 70 percent to 80 percent state-owned banks of large and medium sizes turned out satisfactory results in their capital regrouping reforms. Generally speaking, China, as an economic entity in transformation, has successfully improved its bank quality through reforms.

Zhou revealed that in the next stage reform would be launched in 120 city commercial banks. Their bad-loan rates are quite low, and 70 percent of them will be regrouped in terms of capital. The last to confront the reform are rural cooperatives nationwide. They all face many problems since their loan quality is low. In fact, big reforms have been launched in this regard by the government in recent years.

Talking about China's capital market, Zhou said that the capital market contains many things and is very important. Some traditional bank products have been increasingly combined with the market. China has a high rate of deposit, and the society mainly relies on banks for fund support. He stressed three points on the capital market development. First, we must have clear objectives for accelerating the development of bond market; second, unnecessary restrictions must be removed to allow more commercial banks and institutions into the operation of corporation bond market and capital market; third, there must be a series of policies to encourage creativity and innovation on financial products.

By People's Daily Online