CHINA BANKING AND FINANCE NEWSLETTER
Vol. 4, No. 2 - February 17, 2003
TOPICS THIS ISSUE:
- Tax Revenue To Increase
- Citibank To Offer Internet Banking
- Household Savings Jump To A Record $8 Trillion
- Bank Of India Eyes China License
- China Everbright Reports 21 Percent Growth in Assets
Tax Revenue To Increase
Zhang Peisen, a senior expert with the Chinese Taxation Research Institute, stated that tax revenue would grow 13 per cent in the year 2003, compared with 12.1 per cent in the year 2002.
He based his predictions on the country's projected economic development in 2003, specifically noting that China's consumer goods market will pick up, and non-government investment, including foreign investment, will become more active.
Economic growth is expected to contribute about 60 per cent to the total tax revenue this year.
Meanwhile, the government will continue to increase it ability to carry out effective tax collection. Such efforts by the government are expected to contribute more than 30 per cent to the total tax revenue.
The State Administration of Taxation earlier announced that the government would expand tax supervision to cover taxpayers who paid annual value-added tax and consumption tax income of more than 5 million yuan (US$602,410) and to those who paid annual business income of more than 1 million yuan (US$120,000).
The government will also launch investigations into suspected tax evasion cases.
An earlier report said those to be targeted included movie stars, sport agents, real estate middlemen and other big earners.
Source: China Daily
Citibank To Offer Internet Banking
Citibank announced it had received approval from the People's Bank of China to offer Internet banking services to domestic and international companies, as well as consumers in China.
The move makes Citibank the first foreign bank in China to offer e-banking services to both corporate and individual clients.
With the new license, Citibank brings its global services such as CitiDirect Online Banking and Easy Payments to its clients in China.
Source: China Daily
Household Savings Jump To A Record $8 Trillion
China's household savings jumped 17.8 per cent to top a record 8.7 trillion yuan (HK$8.1 trillion) in 2003, with average per capita disposable income rising to 7,500 yuan, a 10 per cent rise over 2001, state media reported yesterday.
Urban household assets also rose to an average of 228,000 yuan, while urban financial assets rose to an average of 80,000 yuan, Xinhua quoted the State Council's Development Research Centre as saying.
While state media trumpeted the statistics as good news, economists reacted cautiously to the report.
"On the surface the rise of household savings is good news," said Hu Bingliang, an economics professor and research fellow at the Chinese Academy of Social Sciences. "But in reality, it may not be good news."
Though the rise in household income helps China's four large, troubled state banks - which hold most of the deposits - the increased savings also mean that consumers do not have investment alternatives other than putting money in the bank.
The State Council admitted that a main cause of the rise in household savings was a lack of confidence in the stock markets, with only 7 per cent of all mainland consumers owning shares, the lowest level in two years.
Government economists indicated that the government needed to better utilize the excess capital and build a stronger consumer credit system.
Few of the mainland's state banks offer consumer credit cards or even lend money to consumers. Most only take deposits and loan the money to state-owned enterprises, offering few if any consumer services.
Source: SCMP
Bank Of India Eyes China License
Bank of India plans to open a full branch in Shenzhen within two years, subject to regulatory approval.
The Indian state-owned bank's Hong Kong head, A.R. Kuppuswamy, said it was looking towards opening other branches on the mainland, subject to demand.
"Within two years, provided we show better growth, we want to upgrade this [the representative office] into a fully fledged branch, thereafter we will look for more avenues for opening more branches, depending on market demand," Mr Kuppuswamy said.
He said an upgrade would be subject to approval by the People's Bank of China (PBOC) China's central bank.
"The PBOC officials have assured us, that depending on the performance of our representative office, they would like to upgrade it at the right time," Mr Kuppuswamy said.
Bank of India recently opened its first representative office in Shenzhen. While it does not possess a full banking license, it will focus on providing consultancy, liaison and market survey services.
Its objective was to initially serve Indian businesses already operating in Shenzhen, but it would look to target mainland businesses with business ties to India, Mr Kuppuswamy said.
The bank said there were 60 Indian traders with a presence in Shenzhen.
Founded in 1906, Bank of India last year returned profits of US$104 million, and has total assets of US$14.3 billion worldwide.
The bank has a global network of 2,549 branches, mostly in India.
Source: SCMP
China Everbright Reports 21 Percent Growth in Assets
China's financial giant China Everbright Group Co. reported year-on-year growth of 21 percent in its assets in 2002, according to the latest report released by the company.
Without revealing the figure of its assets, the company said financial assets accounted for 97 percent of the total, involving banking, securities and insurance.
The Everbright Bank under the group reported 330 billion yuan (US$40 billion) in total assets by the end of 2002, up 33.2percent year on year with 636 million yuan (US$77 million) in pre-tax profits, up 221 million yuan (US$26.9 million).
Bad loans accounted for 12.5 percent of all its loans, down by 6.1 percentage points, according to the report.
Everbright Securities Company recorded 570 million yuan (US$69 million) worth of business revenue, including 30 million yuan (US$3.65 million) in profits. Its total assets reached 10.2 billion yuan (US$1.24 billion).
Addressing a meeting on the group's annual performance, Wang Mingquan, chairman of the group, said the group would continue to improve corporate governance and control risks in 2003.
Source: Xinhua News Agency
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