Yi Gang, deputy secretary-general of the Monetary Policy Committee of the People's Bank of China, called for acceleration of developing non-government banking system to meet the challenges posed by global financial integration.

Yi made the appeal at the 6th Cross-Straits Finance Symposium held recently in Beijing.

The significance of developing the non-government banking system, according to him, is manifested in the following three aspects: first, it helps promote competition, changing the present pattern of monopoly by the four largest state banks as quickly as possible to form a market environment of positive competition.

Second, it helps solve the distortion of resource allocation. At present, the state-owned industrial enterprises contribute less than 30 percent to the national total output, while they consume about 70 percent of the total credit capital of state-owned banks.

Third, decentralization of the banking system is conducive to strengthening financial management of the central bank.

It is reported that the policy-related functions borne by state-owned commercial banks cannot be released very soon, so the interference from the government will continue to exist.

Besides, it takes time to reform state banks' property rights, regroup assets and establish a modern legal person administrative system. Under such circumstances, banks in China's mainland should adopt more active measures to improve the existing banking system.

(People's Daily 11/06/2000)