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For three years, Weng Yifeng, President of Rui'an HuafengMicro-Credit Co. Ltd. in Wenzhou, has dreamed of transforming hissmall micro-credit company worth 1 billion yuan ($157.98 million)into an established bank. In 2008, Weng and several partners set upRui'an with a registered capital of 200 million yuan ($31 million).Limited to granting credit, the company was strictly prohibitedfrom taking deposits, a standard practice at most banks. Recent developments in China's banking regulation, however, aremaking it easier for Weng and other prospective bankers to enterChina's burgeoning banking sector, an industry that for long hasbeen monopolized by state firms. The new policy will help shatterthe stranglehold on state-owned enterprises across the country tohave access to financing. On May 25, the China Banking Regulatory Commission (CBRC) issuedfollow-up opinions from a 2010 document to encourage and guideprivate capital. The CBRC document this time is part of thedetailed rules to implement the 2010 State Council opinions.According to the CBRC document, private capital will be grantedalmost equal access to the banking industry. Under the new policy, Weng will face fewer difficulties inrealizing his dream. He said after transforming his company into abank, he expects a market-formed interest rate to be created,because only with market-formed interest rates, small financialinstitutions like his can seek better development. Banking is not the only industry where monopolies will be broken.The Ministry of Railways, China Securities Regulatory Commission(CSRC), Ministry of Health and Ministry of Communications haveissued detailed rules on encouraging private capital to entermonopolized industries under their supervision. Relaying growth "Under the current economic situation, it's getting more and moreimportant to mobilize capital of various types," said Zhao Xijun,Vice President of the School of Finance of Renmin University ofChina. China's economy is currently in a critical stage of development:With growth continuing to slow, the economy faces restructuring,industrial upgrading and transformation of the growth pattern. "Opening industries to private capital and inspiring privatecapital will undoubtedly have far-reaching significance instimulating the Chinese economy, promoting the transformation ofthe economic growth pattern and maintaining long-term sustainableand sound development," said Zhao. Following the global financial crisis in 2008, the ChineseGovernment strategically launched a 4-trillion-yuan ($631.91billion) stimulus package. Government-initiated public investmentplayed an essential role in facilitating a quicker bounce back inthe world economy. However, the economic growth was restricted bythe fiscal ability of the government. Public investment is likelyto cause overheated investment and surplus production capacity. Incontrast, private investment is more efficient and will also besignificant to solving problems involving imbalances in the Chineseeconomy. Gu Shengzu, an economist and member of the Standing Committee ofthe 11th National People's Congress, thought during the post-crisisperiod the practice of making private investment relay publicinvestment is the most important strategic choice to ensuresustainable economic growth, because compared with publicinvestment, private investment features flexible mechanisms, highefficiency, high potential, strong sustainability and facilitationto innovation and employment. Private investment will play a keyrole in reinvigorating the economy and realizing sustainableeconomic growth. I am an expert from seamlessweldedpipe.com, while we provides the quality product, such as China Duplex Stainless Steel Pipe , Stainless Steel Bright Annealed Tube, Carbon Steel Seamless Pipe,and more.
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