TNAG-2792-FCO40-4031-Relations-between-Hong-Kong-and-China-1993 — Page 123

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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with a view to influencing or adjusting the overall level

of economic activity, through the use of such tools as

rates, banking reserve

requirements, discount facility, and issue of debt

instruments to financial institutions.

interest

rates,

exchange

In addition, it

will supervise the entire banking sector, and the money and

debt markets.

47.

loans.

As to the state specialised banks, they will maintain separate accounts for policy loans and commercial In one to two years' time, new banks responsible solely for providing policy loans and commercial loans will be set up, and some existing banks will SO re-constitued(14).

Banks involved in

respectively

also be

commercial lending will have to comply with international standards pertaining to prudential supervision of banks, including the capital adequacy ratios laid down by the Basle Committee, and to make adequate provisions for bad debts. Also, they will have to adopt commercial principles

in assessing the viability and risks of loans. Banks policy lending, on the other hand, will

involved in

(14) China is

currently contemplating a new "Commercial Banking Law", which will lay the foundation for a banking supervision system in the country. According to a press report, the PBOC branches in Guangzhou and Shenyang have been chosen as experimental points for the transformation into state-owned commercial banks by the end of this year.

Moreover, China plans

to set up three more state specialised banks for channelling credit into major projects according to the government's policy State Long-term

priorities.

These

are

the

Development Trust Bank, which is responsible for financing key construction projects; the Import and Export Credit Bank, which is responsible for providing credit for export of capital goods; and the Agricultural Policy-Oriented

Bank,

which is responsible for promoting projects for agricultural development.

The first two banks will be set up by the end of 1993, and the third one probably by 1994.

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