Beijing's Leading Banker on China's Growth | Newsweek World

‘We Will Not Let Go of Reform’

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More mature capital markets are key to China ' s economic growth. How should the Chinese banking system evolve?
In China, commercial banks hold a lot of money, but securitization is not well developed, and we have to address this issue. We need more securities innovation. We need the corporate bond market to be pushed forward. We need to change the idea that companies should get money from banks rather than from the securities market.

Some people are concerned that in the midst of the downturn, even more bad debt in Chinese banks will come to light next year. Are you worried about this?
When I came in to ICBC in 1999, the level of nonperforming loans was 47 percent. In October of this year, the rate was 2.37 percent, which is down from the same quarter last year. That said, we are expecting an increase in the fourth quarter, mainly among small and midsize businesses. And lending will be influenced by this. One way in which we are dealing with risk is to charge higher interest rates, about 16 percent higher, on such loans.

What ' s your view on Obama and his new economic team?
I think Obama has some very serious challenges ahead of him in sorting out the financial crisis. But I know [incoming Treasury Secretary] Tim Geithner, and I think he is a wise man.

Which financial leaders in the United States do you admire most?
I won't choose among my friends, but I will say that in general, the trait I admire most is their innovation. Americans have endless passion for innovation. Maybe in the past, the innovation hasn't been so well regulated, but we can't stop it. It's one of the most important ways to push enterprise forward.

In the past, you ' ve been quoted as saying you want ICBC to be the Citigroup of China. Would you still use those words?
[Laughing] I'm not sure I used exactly those words. But it's true that the list of the world's top banks has evolved over the last 100 years, from European banks to Japanese banks, and, later, U.S. banks. I think that list will continue to become more diverse. Right now, ICBC is the world's largest bank by market capitalization, and it will be one of the most profitable this year.

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Do you think the growth will still be 8% if China starts spending some money on Quality Control, use 100% milk in eatables instead of adding Melamine and Lead? A number of people have died or are sick after taking tainted Heparin made in China; once people stop buying these tainted, sub-standard cheap products, the growth pattern will bw reversed and Americans will have more jobs at home; then we will ask this gentleman hoe did China achieved growth in he past- answer is by cutting all those Quality Control costs and by making it's products cheap and competetive- although unhealthy and dangerous- but who cares; they made some Trillion US dollars!!