China Development Bank (CDB) is a policy bank of China under the State Council. Established in 1994,it has been described as the engine that powers the national government's economic development policies.[2][3] It has raised funds for numerous large-scale infrastructure projects,including the Three Gorges Dam and the Shanghai Pudong International Airport.
The bank is the second-largest bond issuer in China after the Ministry of Finance. In 2009,it accounted for about a quarter of the country's yuan bonds and is the biggest foreign-currency lender. CDB debt is owned by local banks and treated as a risk-free asset under the proposed People's Republic of China capital adequacy rules (i.e. the same treatment as PRC government bonds).[3]
The China Development Bank[4] (CDB) was established in March 1994 to provide development-oriented financing for high-priority government projects. It is under the direct jurisdiction of the State Council and the People's Central Government. At present,it has 35 branches across the country and one representative office. The bank provides financing for national projects such as infrastructure development,basic industries,energy,and transportation.[5]
The main objective as a state financial institution is to support the macroeconomic policies of the central government and to support national economic development and strategic structural changes in the economy.[6]
In the last decade,CDB has issued 1.6 trillion yuan in loans to more than 4,000 projects involving infrastructure,communications,transportation,and basic industries. The investments are spread along the Yellow River,and both south and north of the Yangtze River. CDB has been increasingly focusing on developing the western and northwestern provinces in China. This could help reduce the growing economic disparity in the western provinces,and it has the potential to revitalize the old industrial bases of northeast China.[7]
Since 1997,CDB has reduced bad debts,returning to profitability under Governor Chen Yuan,the eldest son of Chen Yun. Chen was formerly the executive deputy governor of the PRC's central bank,The People's Bank of China. International financial standards and better practices were introduced under his leadership.
CDB plays a major role in alleviating infrastructure and energy bottlenecks in the Chinese economy. In 2003,CDB made loan arrangements for,or evaluated and underwrote,a total of 460 national debt projects and issued 246.8 billion yuan in loans. This accounted for 41% of its total investment. CDB's loans to the "bottleneck" investments that the government prioritizes amounted to 91% of its total loan count. It also issued a total of 357.5 billion yuan in loans to western areas and more than 174.2 billion yuan to old industrial bases in Northeast China. These loans substantially increased the economic growth and structural readjustments of the Chinese economy.[8]
At the end of 2004,the bank's total credit assets were RMB 1,378.6 billion,with a current principal and interest recovery ratio of 99.77%,after 20 consecutive quarters of world-class performance. The bank's non-performing loan ratio stood at 1.21%,a decrease of 0.13 percentage points year over year. The coverage ratio of its risk reserves against non-performing loans was 285%,and its capital adequacy ratio reached 10.51%. During 2004,the bank made a profit of about US$2 billion.[9]
In 2005 and 2006,CDB successfully issued two pilot Asset-Backed Securities[10] (ABS) products in the domestic China market. Along with other ABS products issued by China Construction Bank,CDB has created a foundation for a promising debt capital and structured finance market.[11][12]
In 2010,CDB provided $30 billion in financing to Chinese solar power manufacturers.[13]:1
At the end of 2010,CDB held US$687.8 billion in loans,more than twice the amount of the World Bank.[3]
In 2015,China used its foreign exchange reserves to recapitalize CDB,which in turn empowered it to make significant foreign loans.[14]:70
In early 2016,a monumental paifang (Chinese-style gate) that stood in front of the CDB head office building in Beijing was demolished,in what was widely interpreted as a sign of loss of favor from the Chinese political leadership.[15]
In 2017,CDB provided RMB 130 billion to fund infrastructure and environmental upgrading in Xiong'an.[16]:155
As of December 2018,outstanding loans to 11 provincial-level regions along the belt amounted to 3.85 trillion yuan (about 575 billion U.S. dollars),according to the CDB. New yuan loans to these regions reached 304.5 billion yuan last year,accounting for 48 percent of the bank's total new yuan loans. The funds mainly went to major projects in the fields of ecological protection and restoration,infrastructure connectivity,and industrial transformation and upgrading. The CDB will continue to support ecological protection and green development of the Yangtze River in 2019,said CDB Chairman Zhao Huan. China issued a development plan for the Yangtze River Economic Belt in September 2016 and a guideline for green development of the belt in 2017. The Yangtze River Economic Belt consists of nine provinces and two municipalities that cover roughly one-fifth of China's land. It has a population of 600 million and generates more than 40 percent of the country's GDP.[17]
The Governors of the bank report to a Board of Supervisors,who are accountable to the central government. There are four vice governors and two assistant governors.[20] At the end of 2004,CDB had about 3,500 employees.[citation needed] About 1,000 of CDB's employees work at the Beijing Headquarters,with the rest in 35 mainland branches;including a representative office in Tibet and a branch in Hong Kong.[citation needed]}
As of 2021,the CDB has more than 9,000 employees.[1]
The bank does not take private savings,so it does not have local branches like many other major banks.
Stuart Gulliver,executive director of HSBC signs a "Memorandum of Understanding" with Zheng Zhijie,Vice Governor of China Development Bank,10 January 2011.
The International Bank for Reconstruction and Development (IBRD) is an international financial institution,established in 1944 and headquartered in Washington,D.C.,United States;it is the lending arm of World Bank Group. The IBRD offers loans to middle-income developing countries. It is the first of five member institutions that compose the World Bank Group. The initial mission of the IBRD in 1944,was to finance the reconstruction of European nations devastated by World War II. The IBRD and its concessional lending arm,the International Development Association (IDA),are collectively known as the World Bank as they share the same leadership and staff.
In justifying opening up and the series of economic reforms that ensued in China,Deng Xiaoping referred to Karl Marx and his theories,which predicted that nations need to undergo urbanization and a stage of capitalism for a natural socialist transition. One of the most renowned reforms under Deng was establishing four "special economic zones" along the Southeastern coast of China,with Shenzhen,Shantou,and Zhuhai located in Guangdong province and Xiamen located in Fujian province. The four aforementioned special economic zones were all established from 1980 to 1981. As of 2024,there have been 3 additional special economic zones. In 1988,Hainan became the fifth "SEZ". In 1990,Pudong district in Shanghai became the sixth "SEZ". In 2009,Binhai district in Tianjin became the seventh "SEZ". Special economic zones (SEZs) in mainland China are granted more free market-oriented economic policies and flexible governmental measures by the government of China,compared to the planned economy elsewhere.
Chen Yuan is a Chinese economist who is the current chairman of the China Association for International Friendly Contact (CAIFC). He was previously the chairman of the China Development Bank from March 1998 to April 2013. Chen Yuan then served as Vice Chairman of the National Committee of the Chinese People's Political Consultative Conference from 2013 to 2018. He is the eldest son of former Vice Premier Chen Yun.
China's banking sector had CN¥319.7 trillion in assets at the end of 2020. The "Big Four" state-owned commercial banks are the Bank of China,the China Construction Bank,the Industrial and Commercial Bank of China,and the Agricultural Bank of China,all of which are among the largest banks in the world As of 2018. Other notable big and also the largest banks in the world are China Merchants Bank and Ping An Bank.
The Export–Import Bank of China is a policy bank of China under the State Council. Established in 1994,the bank was chartered to implement the state policies in industry,foreign trade,economy,and foreign aid to other developing countries,and provide policy financial support so as to promote the export of Chinese products and services.
China has an upper middle income,developing,mixed,socialist market economy incorporating industrial policies and strategic five-year plans. It is the world's second largest economy by nominal GDP,behind the United States,and the world's largest economy since 2016 when measured by purchasing power parity (PPP). China accounted for 19% of the global economy in 2022 in PPP terms,and around 18% in nominal terms in 2022. The economy consists of public sector enterprises,state-owned enterprises (SOEs) and mixed-ownership enterprises,as well as a large domestic private sector and openness to foreign businesses in their system. Post-1978 economic reforms China's average GDP growth had been over 10% annually for over three decades,and in some years,growth exceeded 14% annually.
The 2008–09 Chinese economic stimulus plan was a RMB¥4 trillion stimulus package aiming to minimize the impact of the financial crisis of 2007–2008 on the Chinese economy. It was announced by the State Council of the People's Republic of China on 9 November 2008. The economic stimulus plan was seen as a success:While China's economic growth fell to almost 6% by the end of 2008,it had recovered to over 10% by in mid-2009. Critics of China's stimulus package have blamed it for causing a surge in Chinese debt since 2009,particularly among local governments and state-owned enterprises. The World Bank subsequently went on to recommend similar public works spending campaigns to western governments experiencing the effects of the financial crisis,but the US and EU instead decided to pursue long-term policies of quantitative easing.
People's Republic of China –Zambia relations refers to the current and historical relationship between the People's Republic of China (PRC) and Zambia.
China-Ghanaian relations refer to the current and historical relationship between the Republic of Ghana and the People's Republic of China (PRC).
The New Development Bank (NDB),formerly referred to as the BRICS Development Bank,is a multilateral development bank established by the BRICS states. According to the Agreement on the NDB,"the Bank shall support public or private projects through loans,guarantees,equity participation and other financial instruments." Moreover,the NDB "shall cooperate with international organizations and other financial entities,and provide technical assistance for projects to be supported by the Bank."
Chinese foreign aid may be considered as both governmental (official) and private development aid and humanitarian aid originating from the People's Republic of China.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank and international financial institution that aims to collectively improve economic and social outcomes in Asia. It is the world's second largest multi-lateral development institution. Headquartered in Beijing,China,the bank currently has 109 members,including 14 prospective members from around the world. The breakdown of the 109 members by continents are as follows:42 in Asia,26 in Europe,22 in Africa,9 in Oceania,8 in South America,and 2 in North America. The bank started operation after the agreement entered into force on 25 December 2015,after ratifications were received from 10 member states holding a total number of 50% of the initial subscriptions of the Authorized Capital Stock.
The Belt and Road Initiative,known in China as the One Belt One Road sometimes referred to as the New Silk Road,is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organizations. The BRI is composed of six urban development land corridors linked by road,rail,energy,and digital infrastructure and the Maritime Silk Road linked by the development of ports.
The Silk Road Fund is a China Government Guidance Fund to foster increased investment in countries along the Belt and Road Initiative,an economic development initiative primarily covering Eurasia. The Chinese government pledged US$40 billion for the creation of the investment fund established on 29 December 2014.
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Policy bank (政策性银行),or policy lender,refers to non-profit professional financial institutions established by the Chinese government with the goal of implementing the government's economic policies and carrying out financial business in specific fields. This measure separates policy finance from commercial finance and establishes a policy bank to undertake strictly defined policy businesses. Policy banks' sources of funds mainly rely on issuing financial bonds or borrowing from the central bank,and generally do not accept deposits from the public.
A local government financing vehicle (LGFV) (Chinese:地方政府融资平台),also known as a local financing platform (LFP),is a funding mechanism by a local government in China. It usually exists in the form of an investment company that borrows money to finance real estate development and other local infrastructure projects. LGFVs can borrow money from banks,or they can borrow on the open market by selling bonds known as "municipal investment bonds" or "municipal corporate bonds" (城市投资债券or 城投债),which are repackaged as "wealth management products" and sold to individuals.
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1 2 3 Michael Forsythe, Henry Sanderson (June 2011). "Financing China Costs Poised to Rise With CDB Losing Sovereign-Debt Status". Bloomberg Market Magazine.
↑ "Annual report"(PDF). www.cdb-intl.com. 2005. Archived(PDF) from the original on 2019-03-06. Retrieved 2019-10-16.
↑ "Annual report"(PDF). www.cdb-intl.com. 2006. Archived(PDF) from the original on 2019-03-06. Retrieved 2019-10-16.
↑ Lewis, Joanna I. (2023). Cooperating for the Climate: Learning from International Partnerships in China's Clean Energy Sector. Cambridge, Massachusetts: The MIT Press. ISBN978-0-262-54482-5.
↑ Murphy, Dawn (2022). China's Rise in the Global South: the Middle East, Africa, and Beijing's Alternative World Order. Stanford, California: Stanford University Press. ISBN978-1-5036-3009-3.
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