Description
This book investigates the role of corporate governance in the reform of city commercial banks in China. City commercial banks had humble beginnings as urban credit cooperatives that were restructured into banking entities in the mid nineteen nineties. Now forming the third tier of China s banking sector, the city commercial banks play an important role in the economic development of China as the majority of loans extended by these banks are to the small and medium enterprises sector which is the most dynamic economic sector in China today. China had 136 city commercial banks at the end of 2008 and 13 of them had foreign strategic partners. Most of the foreign partners are international banking organisations who took equity stakes of between ten and twenty percent. All of these partnerships were characterised by contractual agreements that required the establishment of a fund for transfer of expertise and management skills and the overall improvement of banking expertise. The author interviewed ten of these banks and analysed their financial performances in comparison to those city commercial banks which did not have foreign partners. It found conclusively that city commercial banks with foreign strategic partners had greatly improved corporate governance practices and in addition, vastly superior financial performances and that several of these banks were rewarded by the China Banking Regulatory Commission with licences to open additional branches in other provinces. Corporate Governance and Banking in China is the new definitive text on Corporate Governance Reforms in China’s Banking industry. Whilst it focuses on China’s regional banks, there are lessons that apply overall to the industry. It contains case studies on ten city commercial banks with foreign banking institutions as shareholders and is a road map for banking institutions wishing to invest in China. As a study of coroporate governance in the Chinese banking sector this book will be of huge appeal to students and scholars of Chinese business and economics, corporate governance and banking.
