Is China Finally Ready For Private Banks?

"In terms of regulations, there is nothing forbidding the formation of private banks in China"
"In terms of regulations, there is nothing forbidding the formation of private banks in China"


BEIJING - In the past month, China's State Council, Central Bank and Banking Regulatory Commission have all encouraged restructuring and reforming the nation's financial institutions with private capital so that banks can take their own risks. Though the aspiration to establish private banks isn't new, the fact that a number of top Chinese institutions are promoting the idea suggests that it may soon actually happen.

In terms of regulations, there is nothing forbidding the formation of private banks within China's commercial financial system. That is to say that, technically, there is no obstacle to founding them. But they have failed to emerge because the regulatory requirements for funding and investment ratios are much too harsh. This is despite both governmental policymaking and propaganda supporting their creation.

In recent years, China's regulatory authority has been vigorously promoting rural banks, but financial capital from private investment shouldn't be limited to the rural market. That only makes it more difficult to mobilize further private capital.

And there are also basic problems of perception that block progress. Just the phrase "private bank" arouses debate. Some believe that they are financial institutions that serve only private enterprises, whereas others think they follow the corporate governance model.

A bank is a bank

We believe that the definition of "private banks" is not important, and that it is not the place of the the government or regulatory institutions to define them. Banks initiated with private capital should not be regarded as somehow fundamentally different in function from other banks.

The division of banks should be according to the existing systems of sole proprietorship, cooperation or joint-stock, and should compete under the same regulatory guidelines. The government should establish the basic regulatory framework and legal environment for the financial sector so that all banks can fairly compete, and the best ones can thrive. The so-called "private banks" shouldn't enjoy any special policy. What they need instead is a level playing field so that private investors are willing to participate enthusiastically and have total operational autonomy.

The future economic development of China depends on mobilizing more private financial resources and promoting the entire banking sector's efficiency. The vast majority of Chinese commercial banks are administratively heavy. High-ranking executives in Chinese banks are both managers of the banks and administrative officers, and it's difficult for such a system to nurture real career bankers.

A banker is someone who manages financial assets as a profession in pursuit of maximizing value. They can use their wisdom and creativity to promote financial innovation, and correspondingly they can also take the same risks as commercial banks. This surely would mean prosperity for the entire banking industry -- and the birth of "banker" as a real career path.

China's financial industry has entered a critical stage of the internationalization of its currency (the RMB), the marketization of the interest rate, and a broader economic transformation. Allowing private capital to cultivate true local bankers is now imperative. Finance is the core power of a market economy, and it needs more diverse services provided by banks and professionals who can enhance the Chinese banking industry.

As Liu Mingkang, former chairman of the China Banking Regulatory Commission says, "They have internal power and external edification so that they can change the old world and project entrepreneurial spirit."

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What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel


BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.

Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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