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- >2009
- >Day 3: March 26
- >Jiang Jiangqing, ICBC
World's Biggest Bank speaks at AIC
The Chairman of the Industrial and Commercial Bank of China has updated investors in Hong Kong on the world’s biggest bank’s performance and the impact of macroeconomic trends on China’s banking industry.
Jiang Jianqing, Chairman of ICBC, detailed the strengths of the Chinese economy and banking system during a luncheon keynote address to a full house at the Credit Suisse Asian Investment Conference. Interest in Mr. Jiang’s speech reflected the Chinese banks’ stature among global financial institutions. As he pointed out: “Out of the 10 largest banks in the world, four are Chinese banks.”
Mr. Jiang acknowledged that China could not escape the turmoil afflicting the global economy as external demand fell, leading to consequences such as rising unemployment and deflationary pressures. And he cautioned the audience to expect tough times ahead. “The Chinese economy and banking industry still face a lot of difficulties and uncertainties,” he said. “External demand is a major risk. We still haven’t seen the bottom of the economic and financial crisis.”
Acknowledging that risk management became a priority under more challenging economic circumstances, Mr. Jiang argued that the Chinese banking sector was being prudent and targeted in its credit creation as the Chinese Government took measures to stimulate the economy. “Our loans have become more selective and non-performing loans are controlled,” said Mr. Jiang, adding that new loans were being aimed primarily at the infrastructure sector.
ICBC was well prepared to face a more challenging environment, he said, and he expressed his hope that China could turn “crisis into opportunity.” In particular, Mr. Jiang said he believed there was an “opportunity for China to change its growth model,” transitioning from an export-led economy to one driven more by domestic consumption. But he sounded a cautious note in the short term. “It is difficult to say if domestic consumption can make up for the loss in external demand," he said. “The effects of some of the measures aimed at boosting domestic consumption are yet to be seen. It is also difficult to say if the external demand will continue to deteriorate.”
Discussing ICBC’s strategy, he pointed out that the bank was already present in 15 overseas countries or locations, but that overseas assets still only accounted for 2% to 3% of its portfolio. “Our strategy is to follow the expansion path of Chinese enterprises,” said Mr. Jiang. “We can expand overseas by opening branches or through mergers and acquisitions. Our focus has been on opportunities in emerging markets in Asia, which explains why our acquisitions have been pretty successful, as Asia has been less affected by the financial crisis.”
Mr. Jiang went on to address a question concerning China’s currency and its management by government. “China has made many adjustments to it foreign exchange regime in response to the market,” he said. “This process will not change.” He added that China was carefully monitoring the value of its large U.S. Treasury holdings as the U.S. government increased its borrowings. “The guaranteed safety of U.S. Treasuries is a concern for all Chinese nationals,” he said. “This issue is as important to China as it is to the U.S. “
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Day 3: Photo Album
