"The time is not yet ripe for state-owned banks to adopt a shareholding system,'' he said. "It is unlikely they will be listed on the stock market in the near future.''

Although going public will help banks meet investors' demands for profits and transparency, listing cannot be treated as the ultimate goal of banking reform, Wang said in an exclusive interview with China Daily.

Listed companies should bring hope to investors instead of bringing them burdens, he said.

"If I bring the bank to the market, I want to offer an investment choice with potential of growth and good returns instead of merely taking money from investors' pockets,'' he said.

If state banks neglect their internal restructuring and do not adapt to new business concepts before going public, they could end up being kicked out of the market, he said.

Since state-owned banks -- the Industrial and Commercial Bank of China, the Agricultural Bank of China, the China Construction Bank and the Bank of China -- have been operating under a centrally planned economy and so often regard themselves as government organizations instead of commercial banks.

"They have a weak sense of responsibility to their creditors,'' said Wang.

State-owned banks should not only be responsible to their shareholders and the country, but also to depositors or, in other words, their creditors, Wang said.

Although China launched reform of its financial sector years ago, the idea of "being responsible to creditors'' is still not established, he said.

Time is running out as the banking sector braces itself for the country's accession into the World Trade Organization (WTO), said Wang.

Analysts believe entry into the organization will, in time, lead to a full opening up of the banking industry.

Although the four state-owned banks account for the bulk of the domestic financial market, they are far less experienced in management than their counterparts in developed countries.

Wang, who has a dream of building a domestic bank strong enough to compete with foreign banks across the globe, said the challenge facing China's state-owned banks is daunting.

But Wang, a sports fan and a bullion and foreign exchange dealer of 22 years, showed his character and his love of challenges.

"Foreign banks are not our enemies,'' he said. "The increasing number of foreign banks in China after WTO accession will not only bring competition, but also new business ideas, financial innovation, new products and management techniques.''

China's state banks will have to reform themselves to build up their competitive edge, he said.

Since taking his position as president of the China Construction Bank six months ago, Wang has mapped out a reform plan for the bank.

The reform strategy will involve the bank's organization framework, planning management, credit policy, its information and technology systems, internal controls, human resources and payment systems.

The bank has restricted and has established four major departments -- corporate banking, individual banking, real estate credit and intermediary business.

"We try our best to meet the demands of our clients,'' he said, "What the clients want is what we will provide. In the past, clients only enjoyed services which the bank could offer.''

The reshuffle will be completed next year and will eventually spread to all branches.

China Construction Bank will work out a more concrete strategic business plan to give it a clearer operational guide, Wang said.

Human resources reform will be the hard nut during the reform process because it will break the system of "iron chairs'' for officials and "iron rice bowls'' for staff, which gives them jobs for life, he said.

It is easy to break the "iron chair'' system because the China Construction Bank has less than 2,000 managers, but it will be more difficult to break "iron rice bowls'' for the bank's 420,000 employees.

But Wang said this reform did not necessarily mean staff would be laid off.

"If a company depends on staff reduction to survive, it has few days left,'' he said. "More people will be retrained and sent to the marketing department.''

Wang said that entry into WTO will surely lead to the loss of some talented personnel, "but we do not fear it because it will force our human resources departments to make efficient use of personnel.''

Wang said the China Construction Bank will increase cooperation with other non-banking financial institutions, including insurance companies, to expand its business.

"We have made strategic alliances with several insurance companies to share some resources.

"This will not only help our bank generate new business, but also help insurance companies reduce costs,'' he said.

But this does not mean China's commercial banks will rush to create a universal banking system in which banks are allowed to provide other financial business such as insurance or securities.

China has decided to adopt a compartmentalized approach in regulating different parts of the financial sector. As a result, financial institutions in one of the three sectors -- banking, insurance and securities -- can only operate within that designated sector and are not allowed to merge operations with others.

(China Daily 10/08/2000)