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Serving Quality Development with Financial Power


A senior executive at the state-owned Industrial and Commercial Bank of China explains the role of finance in transitioning China’s economy and development model from quantity to quality in order to better serve the people and achieve national rejuvenation.

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Finance is the bloodline of the real economy and the core competitiveness of the country. Since the 18th National Congress of the Chinese Communist Party (CCP), General Secretary Xi Jinping has made a series of important discussions on financial work from the perspective of the overall development of the cause of the party and the country; clarified the status, roles, and tasks of finance; pointed out the way forward; and provided fundamentals for financial work to follow. As an important part of our country’s financial system, state-owned commercial banks must adhere to the guidance of Xi Jinping’s ideology of socialism with Chinese characteristics for the new era, thoroughly study and implement the spirit of General Secretary Xi Jinping’s important speech and important instructions, and bear in mind the “two overall interests” and have a clear idea of the “great power of the country”; take serving the people’s better life and promoting common prosperity as the goal; fulfill the three tasks of serving the real economy; prevent and resolve financial risks; deepen financial reform; and contribute financial strength to serving the building of a new development landscape and promoting high-quality development. 


I. Adhere to the Origin of the Real Economy of Financial Services 


General Secretary Xi Jinping pointed out that finance must serve the real economy and meet the economic and social development and the needs of the people. The real economy is the foundation of a strong and prosperous country. To promote high-quality development, efforts must be made to strengthen the real economy. State-owned commercial banks should take serving the real economy as their starting point, comprehensively improve service efficiency and level, and better meet the diversified financial needs of the people and the real economy. 


As well as proactively integrate into national development strategies to improve the quality of financial supply. In recent years, China has continuously promoted changes in the quality, efficiency, and power of economic development to achieve new results. To meet the requirements of high-quality development, state-owned commercial banks must take the initiative to connect with major projects and major projects during the 14th Five-Year period; actively allocate financial resources; improve the distribution of investment and financing for new manufacturing, new service industries, new basic industries, and high-tech enterprises; and promote the improvement of their core competitiveness. 


The Industrial and Commercial Bank of China (ICBC) has thoroughly implemented the requirements for deepening supply-side structural reforms and has stepped up its support for key areas and weak links. It became the first commercial bank with a loan balance of over 2 trillion yuan in manufacturing by focusing on the transformation and upgrading of traditional manufacturing industries and cultivating the momentum of advanced manufacturing industries. It initiated the “whole industry chain view” with the core enterprise as the key node and improved the service capabilities of core enterprises and the entire industry chain. On the one hand, it helped the leading enterprises of the industrial chain, as well as research and design centers, key parts production, and other links in the country, to achieve a “stabilized chain.” On the other hand, it actively served strong enterprises to develop abroad, took the initiative to participate in the rebuilding of the global industrial chain, and strengthened China’s position in the global industrial chain. It deeply implemented the concept that green water and green mountains are invaluable assets, focusing on carbon peak and carbon neutrality targets, and made rational arrangements for the total amount, structure, and investment of green investment and financing; guided nongovernmental capital to flow in an orderly way to green and low-carbon sectors; issued the first carbon-neutral bonds and carbon emission rights mortgage loans; and unswervingly promoted ecological priority and green development. The outstanding green loans of commercial banks exceeded 2 trillion yuan for the first time. 


It improved the level of service to the national economy cycle and met the needs of the people for a better life. It promoted stable consumption growth and the formation of a strong domestic market are important elements in promoting high-quality economic development. Finance is an effective means to promote consumption and an important tool for safeguarding people’s livelihood. 


The ICBC adheres to the philosophy of people-oriented development; focuses on key areas of people’s livelihood such as employment, social security, medical care, housing, and pensions; and continues to improve the financial product and service system and promote the landing of financial services to more consumer groups and richer consumption scenes. Efforts will be made to improve the security of financial services, make full use of science and technology to improve the standard of account management, and protect the people’s “money bags.” We will grasp the opportunities for traditional consumption upgrades and new consumption expansion, launch more precisely adapted products and services, promote the simultaneous development of both ends of supply and demand, and upgrade industrial consumption to better realize finance for the people, and enrich people. We will have to innovate credit to benefit farmers, reduce the cost of comprehensive financing, promote “thousands of counties and thousands of faces” self-service by digital means, and provide strong support for the county economy. The ICBC launched the Xingnongtong brand to promote the consolidation and expansion of poverty alleviation and rural revitalization effectively and to enhance the breadth, depth, and temperature of financial services. 


II. Holding the Bottom Line of Systemic Financial Risks Prevention 


 General Secretary Xi Jinping pointed out that financial security is an important part of national security and an important foundation for stable and healthy economic development. Maintaining financial security is a major strategic and fundamental issue that has a bearing on the overall economic and social development of our country. Financial risk is highly conductive, has a wide range of influence, and is of great harm. Preventing and dissolving financial risks, especially preventing the occurrence of systemic financial risks, is the eternal theme of financial work. 


Enhance awareness and bottom-line thinking. Accurately judging the potential risks is a prerequisite for ensuring financial security. We must adhere to bottom-line thinking, improve risk forecasting and identification ability, and strictly guard against various risk challenges. State-owned commercial banks should adhere to the overall concept of national security, clearly understand the situation, grasp the overall situation, carry out responsibilities, set up defenses against major risk factors, establish blocking mechanisms for various risk transmissions, and firmly hold the bottom line of avoiding systemic risks. We will conduct analysis and judgment in advance, timely combing risks with early identification, early warning, early detection, and early handling. Perform well in the autonomous construction of financial infrastructure to help maintain financial stability. 


Adhere to the system concept. Financial security is a complex system project. It is necessary to strengthen forward-looking thinking, overall planning, strategic layout, and overall promotion. Systematic thinking is used to analyze problems and guide work to achieve the uniform quality, structure, scale, speed, efficiency, and security of financial development. State-owned commercial banks should establish a full chain of prevention and control; be aware of sources of risk turbulence, infection points, transmission chains, and impact areas; and maintain a high degree of vigilance against various types of risk transmission. Perform well in the whole process management, strengthen the top-level design beforehand, take fine measures in the matter, and improve the emergency treatment for risk afterward to achieve healthy and sustainable development. Also, to carry out all-round supervision, it is necessary not only to standardize financial operations, but also to strengthen integrity education; strictly abide by political discipline and political rules; improve integrity risk prevention and control mechanism; strengthen supervision of key departments and key positions; and achieve “people, money, and institutional firewalls are firmly in place.” 


The ICBC coordinates various risk points, such as macro and micro, internal and external, domestic and abroad; coordinates the prevention and post-event resolution; coordinates traditional risk management and responses to non-traditional challenges; and strives to be a “bomb dismantler” who perform well in risk prevention and control. 


– Continuously improve the comprehensive risk management system. Introduce guidelines to strengthen the group’s risk management system, improve risk management capabilities, and compress prudent management responsibilities and risk prevention and control responsibilities. Take the lead in setting up a market risk management system that meets global regulatory standards, innovatively establishes a whole life-cycle risk assessment and review mechanism, and comprehensively improves risk prevention and control capabilities. 


– Continuously strengthen credit risk prevention and control. Promote the healthy development of the real economy as a fundamental strategy to prevent and mitigate risks, improve the full-scale credit risk management system, and improve the level of full-cycle operation. Reform the credit approval system, adjust the review mechanism, optimize the working mode, create a closed loop of responsibility, and promote the high-quality development of credit business.


– Comprehensively improve the ability to respond to external turbulences. Enhance risk management and control capabilities under open market conditions, and the group’s trading business has remained robust during multiple rounds of turbulence in the financial market. In line with the urgent needs of the industry, with the capabilities of ICBC, it launches nearly 20 products in five categories, including client fund protection, smart credit decisionmaking, transaction risk management, compliance and anti-money laundering management, and “going out” risk mitigation and control, serving more than 300 financial institutions and building a line of risk defense together.


III. Deepening Financial Reforms and Activating Innovative Development Momentum 


General Secretary Xi Jinping pointed out that it is necessary to adapt to the general trend of development that relies more on innovation, creativity, and promotes a change in the structure and quality of financial services. As we enter a new stage of development, China faces even more onerous tasks in financial reform and development, and the role of financial work in economic and social development is increasing. State-owned commercial banks must deepen financial reform and innovation, improve the modern financial enterprise system, actively serve the reform of the financial market, and improve the efficiency of financial services. 


Adhere to the Communist Party of China’s centralized and unified leadership over financial work. Since the 18th National Congress of the CCP, China’s financial industry has maintained rapid development, financial reform has been progressed in an orderly manner, financial products have become increasingly abundant, financial services have become more inclusive, and financial supervision has been strengthened and improved. The key lies in the Party’s leadership of financial work. To perform well in financial work under the new situation, state-owned commercial banks must resolutely implement two “consistently throughout” requirements, integrate Party leadership into all aspects of corporate governance, clarify and implement the legal status of party organizations in the corporate governance structure of the company, and further improve the modern state-owned enterprise system with Chinese characteristics; and give full play to the Party Committee’s role in steering, managing the overall situation and promoting implementation, and truly transform the political advantage of Party leadership and China’s socialist system into operational development advantages and governance effectiveness. Adhere to the principle of party management cadres; establish a correct candidate selection guidance; increase the training of outstanding young cadres; and train, select, and build a cadre team with strong political skills, excellent style, and proficiency in financial work. We should strengthen the restraint and supervision of the operation of power and build an integrated system and institutional mechanism to promote fear of corruption and no desire to corrupt to ensure the sound operation of enterprises. 


The ICBC has actively promoted the work of “Party Building into the Chapter” work by clarifying the Party Committee’s responsibilities, decisionmaking procedures, and guarantee mechanisms in the company’s association, clearly highlighting the leadership role of party organizations and realizing the organizational, institutionalized, and specific role of the Party, and in the modern enterprise system. It fully has embodied the leadership of the Party and the country’s major strategic direction in the modern enterprise system and provided a strong guarantee for the implementation of political, economic, and social responsibilities. It adheres to the party construction of universal coverage, scratching the party, under the above rate, innovative thinking to grasp the party, and promoting party construction work with frequency resonance, harmony, and mutual promotion. Solidly carry out party history learning education, carry out “I do practical things for the masses” practical activities, implement “100-days customer experience” and “top ten actions to improve services,” continue to solve formalism and bureaucracy issues, and expand the effectiveness of reducing the burden at the grassroots level. It adheres to the comprehensively and strictly governing the party, strengthens supervision of the “head” and the “few key” leadership, and explores the establishment of integrated promotion and punishment mechanisms to combat financial corruption and prevent and control financial risks. 


Effectively solving small and medium-sized enterprises’ financing challenges. The Fourth Plenary Session of the 19th Central Committee of the CCP proposed to improve to a modern financial system with high adaptability, competitiveness, and inclusion. In recent years, China’s inclusive finance has developed rapidly; its coverage, accessibility, security, and convenience have been greatly improved. State-owned commercial banks actively expand the breadth and depth of financial coverage, pay more attention to meeting the diversified financial needs of small and micro enterprises, alleviate the problems of financing difficulties and expensive financing for small and micro enterprises, and strive to achieve a combination of “universal” and “benefits.” 


The ICBC carried out financial service capacity improvement project for small and micro enterprises to build credit-type “quick loans for operation,” mortgage-type “network-lending,” and transaction-type “digital supply chain financing”; the three online financing product lines effectively improve the availability of financing and improve the efficiency of capital use. In-depth implementation of “ICBC inclusive banking,” “thousands of experts enter into small and micro enterprises,” “tens of thousands of small and micro enterprises growth plan” and other actions, tailor-made integrated financial service solutions for small and micro enterprises. The “Global Matching Club,” a cross-border matching platform for global enterprises is launched to provide intelligent full-process cross-border matching services to support small and medium-sized enterprises’ 24/7, one-point access to the global industrial chain. 


Promote the two-way empowerment of financial and technological innovation. Finance and scientific and technological innovation are interdependent and jointly promoted. Finance is a powerful tool for promoting scientific and technological innovation. It can provide financial protection for enterprise innovation, share innovation risks, and promote the effective transformation of scientific and technological innovations into productivity. Technological innovation has provided a solid technological foundation for financial development, helping to reduce service costs and enhance financial supply capacities. 


The ICBC coordinated the advancement of financial services technological innovation and its digital transformation and strives to realize financial and technological innovation in both directions. 


– Strengthen the top-level design and upgrade the fintech innovation system. With the aim to build a “digital ICBC” and to comprehensively deploy big data, blockchain, and artificial intelligence, the first enterprise-level data center has been established in the financial industry, realizing the integration of massive financial data assets inside and outside the bank, and fully supporting innovation in multiple fields such as customer marketing, product innovation, risk control, internal management, and ecological construction. 


– Strengthen product innovation and actively meet the financing needs of various scientific and technological innovation subjects. Innovate use of investment-loan linkage, investment-insurance linkage, investment-debt linkage, technology innovation fund, etc., to increase support for key sectors such as qiabozi and new momentum such as strategic emerging industries, modern service industries, and the digital economy. Given the characteristics that the core assets of science and technology-innovation enterprises are talents and knowledge, the company specially launches such exclusive products as science and technology innovation talents loan and intellectual property financing to invigorate the “human resources” and “intelligence” assets of enterprises. We will deepen cooperation with the government, enterprises, and third-party institutions; break down the barriers of production, education, research, and application; and strengthen the synergy of science-tech financial services by building platforms for capital and technology matching for competitive enterprises.


– Strengthen service innovation and support important innovation subjects and key innovation nodes. For key enterprises, national high-tech enterprises, and specialized and innovative small and medium-sized enterprises, we will strengthen comprehensive support for resource matching, price authorization, and green approval and help ensure success in the battle for key and core technologies. We have set up financial service centers for scientific and technological innovation enterprises in Shenzhen, Shanghai, and Guangzhou, where innovative enterprises gather, focusing on cutting-edge industries such as integrated circuits, biomedicine, artificial intelligence, new energy, and other cutting-edge industries to continuously optimize the allocation of financial resources, integrate internal and external resources, provide a package of financial services throughout the whole chain and life cycle for science and technology enterprises, and effectively alleviate their financing problems. 


Building on the new starting point of the Party’s century-old history, the ICBC will unite more closely around the Party Central Committee with Comrade Xi Jinping at the core; better implement the three tasks of financial work; improve the adaptability, competitiveness, and inclusiveness of financial services; and continue to create a new situation for high-quality development. 


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Cite This Page

陈四清 (Chen Siqing). "Serving Quality Development with Financial Power [以金融力量服务高质量发展]". CSIS Interpret: China, original work published in Qiushi [求是], October 1, 2021

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