Financial management
【Study Requirements】
Understand the concept, classification and function of financial
institutions
Understand the general composition of the financial institution system in
Western countries
Master the composition of our country's financial institution system
1. The concept, classification and function of financial institutions
(1) Meaning of financial institutions
Financial institutions are divided into narrow and broad senses.
Financial institutions in a narrow sense refer to intermediaries in
financial activities, that is, institutions specializing in monetary and credit
activities as a medium for transactions between the two parties in the field
of indirect financing, mainly referring to banks and other financial
institutions engaged in deposit and loan business. This type of financial
institution is closely related to money issuance and credit creation, mainly
financial institutions such as central banks and commercial banks.
Financial institutions in a broad sense refer to all institutions engaged in
financial activities, including financial institutions in the field of direct
financing, financial institutions in the field of indirect financing, and various
institutions providing financial services. The main task of financial
institutions in the field of direct financing is to act as a broker between
investors and fundraisers, that is, to buy and sell securities as an agent, and
sometimes themselves participate in securities transactions, such as
securities companies and investment banks.
(2) Types of financial institutions
There are many types of financial institutions, and different financial
institutions constitute the overall financial institution system. From different
perspectives and according to different standards, financial institutions can
be divided into different categories.
1. According to whether it belongs to the banking system, it is divided
into banking financial institutions and non-bank financial institutions
(1) Banks and financial institutions. Banks and financial institutions are
based on accepting deposits and engaging in transfer and settlement
business, with credit creation functions, and their liabilities can play the role of
exchange intermediaries and payment means.
The banking and financial institution system can be classified in a
variety of ways. According to the different status and functions of banks,
there are central banks, commercial banks, policy banks and professional
banks. According to the different forms of capital contribution, there are
wholly-owned banks, joint venture banks, joint-stock banks and cooperative
banks; According to the different ownership of capital, there are state-
owned banks, private banks and public-private partnership banks; According
to the different regions of business scope, there are national banks, local
banks and multinational banks.
(2) Non-bank financial institutions. Non-bank financial institutions do not
have these distinctive characteristics, and their business sources are raised
through the issuance of stocks and bonds, while the asset business is mainly
a financial business that is not loaned, including insurance companies, trust
companies, securities companies, leasing companies, finance companies, etc.
2. According to whether it can accept public deposits, it is divided into
depository financial institutions and non-depository financial institutions
(1) Depository financial institutions. Depository financial institutions
mainly borrow from the public in the form of deposits to obtain their sources
of funds, such as commercial banks, savings and loan associations,
cooperative savings banks and credit cooperatives. Non-depository financial
institutions
It is not allowed to absorb savings deposits from the public.
(2) Non-depository financial institutions. Non-depository financial
institutions can be divided into contractual savings institutions, investment
financial intermediaries and service financial institutions. (1) Contractual
savings institutions are mainly financial institutions that regularly obtain funds
(such as insurance premiums and pension insurance premiums) according to
the contract and provide insurance claims or annuities according to the
contract, such as life insurance companies, property and accident insurance
companies, individual pension insurance funds and government pension
funds. (2) Investment financial intermediaries include investment banks,
investment funds, financial companies, money market mutual funds, venture
capital companies and other financial institutions, which are mainly
characterized by obtaining funds through the issuance of fund shares,
commercial papers or borrowing from banks, and then investing these funds
mainly in various stocks and debt instruments in the capital market or money
market, or making small loans to individuals and small enterprises. (3) Service
financial institutions mainly provide financial information or financial
consulting services, and some companies specialize in financial information
services.
The earliest financial information service agencies were rating agencies,
such as Moody's, Standard & Poor's and Fitch, which specialized in securities
ratings, and Bates, which rated the insurance industry. Other information
institutions that have developed recently are companies that provide
financial data and companies that provide statistics on the performance of
mutual funds.
3. According to the different purposes of engaging in financial activities,
they are divided into financial management institutions and financial
operating institutions
(1) Financial management institutions. Financial management institutions
refer to financial institutions that undertake the important task of financial
macro regulation and financial supervision and are not for profit, such as the
Central Bank, the Securities Regulatory Commission, the Insurance
Regulatory Commission, the Banking Regulatory Commission, etc.
(2) Financial operating institutions. Financial operating institutions refer to
financial institutions that provide a variety of financial products and services
to the public for profit, such as commercial banks, insurance companies,
securities companies, fund management companies, futures companies, etc.
4. According to the nature of the business of financial institutions, they
are divided into commercial financial institutions and policy financial
institutions
(1) Commercial financial institutions. Commercial financial institutions
are financial enterprises that operate independently, bear their own profits
and losses, seek their own balance and develop themselves.
(2) Policy financial institutions. Policy financial institutions are established
by the government of a country to strengthen its ability to intervene in the
economy and ensure the sustained, stable and coordinated development of
the national economy. Most of these institutions are funded by the
government, mainly based on government capital, not for profit, and their
business is closely coordinated with the government's industrial policy.
In addition to the above, financial institutions have other classification
bases. For example, according to the size of capital and the number of
employees, it can be divided into large, medium and small financial
institutions; According to the different fields of activity, it is divided into
regional financial institutions and global financial institutions.
(3) Functions of financial institutions
1. Financial intermediation
The financing function is the possession of all financial institutions, and
different financial institutions have different financing methods due to
different financing instruments issued, but in the end, they reduce the share
of capital in the form of temporary interest in the total social capital. In real
economic life, various sectors of the economy (including governments,
enterprises and individuals) often have capital surpluses or shortages, driven
by economic interests, funds will continue to flow from surplus sectors to
shortage sectors, thus forming financial intermediation. There are two
channels of financing: one is that the department with a shortage of funds
directly issues a certain certificate (financial instrument) from the financial
market to raise funds, and when the department with surplus funds buys
such certificates in the market, the funds will flow from the surplus
department to the shortage department. second, the department with
surplus funds deposits funds in financial intermediaries such as banks, and
then transfers them to departments with capital shortages in the form of
loans or investments. Financial intermediation improves the efficiency of
capital use and is conducive to promoting economic growth.
2. Payment and settlement
Providing payment and settlement services is the earliest function of
financial institutions to meet the needs of economic development, and one
of the main businesses initially provided is exchange. Until now, commercial
banks are still the most basic and main financial units that provide payment
and settlement. As long as there is a creditor's right and debt relationship,
there is a basis for payment and settlement. With the development of
economic integration and the internationalization of the financial market,
the amount of payments between banks has increased significantly, and
participants in various economic activities have paid more attention to the
efficiency and security of the settlement system. With the development of
information technology and electronic technology, some non-financial
enterprises, mainly subsidiaries of large foreign manufacturing enterprises,
have begun to penetrate into the field of payment and settlement, and the
amount of payment and settlement outside banks is constantly expanding.
3. Financial services
They provide diversified services to the public and enterprises in a
variety of ways, such as helping enterprises raise funds in various ways,
underwriting various securities of companies, providing consulting and trust
services for enterprises, providing investment advice to customers, custody
of financial assets, helping customers create financial assets, managing
customers' investment portfolios, etc. These financial services meet the
diversified and personalized needs of enterprises and individuals, and
provide convenient and humanized services for enterprise production and
personal life.
4. Improve information asymmetry
Financial institutions have the function of improving information
asymmetry, which specifically means that financial intermediaries can use
their professional skills and information advantages to collect and obtain
more true and complete information in a timely manner with lower
information processing costs, reduce the degree of information asymmetry,
eliminate adverse selection and moral hazard to a certain extent, and
rationally allocate resources.
5. Risk transfer and management
In economic life, due to the existence of many uncertain factors, people
are exposed to various risks. For example, the risk of loss caused by natural
disasters, the risk of personal injury and property damage caused by
accidents, the risk of fluctuations in commodity prices and stock prices, the
risk of exchange rate fluctuations, etc. These risks can cause great financial
losses to the parties. How can these risks be prevented or controlled? The
financial system provides us with the functions of transferring, controlling
and managing risks. The insurance products provided by insurance
companies provide an effective means for customers to transfer the risk of
loss caused by natural disasters and accidents that may be suffered by the
insured objects. Various financial derivatives in the financial derivatives
market provide market participants with the functions of hedging,
transferring and controlling financial risks such as price fluctuations.
2. The general composition of the financial institution system in Western
countries
The financial institution system in Western countries is generally
composed of central banks, commercial banks, specialized banks and other
non-bank financial institutions.
(1) Central Bank
Internally, it represents the country to exercise leadership and
management over the entire financial system, maintain the safe operation of
the financial system, implement macrofinancial regulation and control, and
is the highest monetary and financial institution in the country. Externally, it
is a symbol of a country's monetary sovereignty. Now almost all countries or
regions in the world have central banks or financial institutions similar to
central banks.
(2) Commercial banks
Commercial banks are money-operated enterprises that can handle
various credit businesses, including demand deposits, for the purpose of
obtaining profits. Through transfer and settlement, commercial banks have
achieved most of the monetary turnover in the national economy, and at the
same time play a role in creating deposit currency. In Western countries,
commercial banks are based on the large number of institutions, wide
business penetration and total asset ratio
It has become the backbone and backbone of the financial institution
system, and has an important position that cannot be replaced by other
financial institutions. Currently, commercial banks in most countries around
the world have become universal banks, engaged in a variety of
comprehensive banking services, and are called "financial department
stores".
(3) Professional banks
A specialized bank refers to a banking institution that specializes in
operating designated businesses and providing certain specialized financial
services. It provides special financial services for a certain industry or sector of
the economy according to the needs of the social division of labor. According to
the characteristics of service objects and the use of credit funds, professional
banks can generally be divided into: development banks, investment banks,
savings banks, export-import banks, housing credit banks, etc. Development
bank is a professional bank established to meet the medium and long-term
capital needs of economic construction. Investment bank is the common name
of the United States and continental Europe, known as merchant banks in the
United Kingdom, industrial banks in France, and securities companies in Japan.
Investment banks are investment financial intermediaries, which mainly issue
medium and long-term loans, and are banks specializing in providing securities
investment and financing services and long-term credit business for industrial
and commercial enterprises. Savings banks refer to financial institutions that
specialize in handling savings deposits for small and medium-sized depositors. It
concentrates idle money in the hands of residents and consumers and invests it
in the field of production and circulation. provide consumer credit and other
loans to residents, such as housing mortgage loans to residents and loans to
municipal institutions. The main way to use funds is to issue real estate
mortgages, invest in government bonds, corporate stocks and bonds, and
transfer excess funds to commercial banks and other financial institutions. The
Export-Import Bank is a bank specializing in providing international financial
services such as foreign trade, non-trade settlement, and credit. The purpose of
establishing the Export-Import Bank is to promote the development of domestic
import and export business, strengthen international financial cooperation,
attract international capital and collect international information. Housing credit
banks are financial institutions that specialize in providing financing services for
residents to purchase houses. The U.S. housing credit system, like the
Agricultural Credit System and the Export-Import Bank, belongs to the same
federal agency, including the Federal Housing Loan Banking Commission and its
affiliated banks, the Federal Home Mortgage Corporation, the Federal Housing
Administration, the National Mortgage Association, and other institutions.
Japan's housing credit institutions are called the Housing Finance Corporation,
which is also a financial institution of the government. The UK calls it the
Housing Credit Association. In addition to the professional banks introduced
above, each country also often adds some specialties that provide certain areas
according to the actual needs of their own economic development and financial
work
Professional banks such as Agricultural Bank of China, Industrial and
Commercial Bank of China, Real Estate Bank, etc. Banks specializing in
serving small and medium-sized enterprises include cooperative banks,
mortgage banks, trust banks, clearing banks, foreign exchange banks and
other types of professional banks.
(4) Non-bank financial institutions
Non-bank financial institutions refer to various institutions that operate
financial business except commercial banks, professional banks, and central
banks. Although banking financial institutions and non-bank financial
institutions have common basic characteristics, that is, they both perform
the functions of financial intermediaries and play the basic role of financial
intermediaries, there are still certain differences between them.
For example, the various financial assets created by banking financial
institutions and non-bank financial institutions for the lender of last resort
are different in terms of liquidity, convenience and risks. These differences
depend on the different sources of these financial assets. This type of non-
bank financial institution should belong to credit institutions, generally not
banks, such as insurance companies, investment funds, securities
companies, finance companies, etc. The insurance company collects
insurance premiums in accordance with the provisions of the insurance
contract, organizes an insurance fund,
Enterprises that undertake economic compensation or fulfill payment
obligations. It can be divided into two main categories: life insurance
companies and property and casualty insurance companies. Investment
funds, also known as mutual funds, are called "unit trusts" in the United
Kingdom and Hong Kong, and "securities investment trusts" in Japan,
Southeast Asia and Taiwan. A securities company is a financial institution that
specializes in buying and selling securities. Its main business is to buy and sell
securities for customers, including the issuance and underwriting of securities.
Finance companies, also known as financial companies, refer to obtaining
funds through the issuance of commercial paper, bonds and stocks.
and the funds are mainly used for financial enterprises with specific consumer
loans and industrial and commercial enterprise loans.
(5) Foreign-funded and joint venture banks
A foreign bank is a bank or branch of a bank opened by a foreign
country within a country. Joint venture banks refer to banks jointly invested
by foreign capital and domestic capital. Countries generally include such
banks in their banking systems and are subject to the supervision of their
financial authorities. With the development of international economic
exchanges, especially the rapid development of multinational corporations,
the pace of bank internationalization has accelerated, and more and more
foreign banks have emerged. Especially in recent years, countries have
expanded according to the needs of their own economic development
Measures have been taken to relax restrictions and manage foreign banks
in order to attract more foreign investment, strengthen international
financial exchanges, and promote the opening up of the country's economy.
3. The composition of our country's financial institution system
After more than 30 years of reform and opening up, our country's
financial industry has achieved great development, and the system structure
of financial institutions has been increasingly perfected.
(1) Financial regulation and regulatory agencies
Financial regulation and regulatory authority is the national financial
regulatory agency that supervises, restrains and regulates financial
institutions and their activities in the financial market in accordance with
national laws and regulations. Its basic tasks are: to formulate and
implement relevant financial laws and regulations in accordance with the
authorization of laws and regulations and the principle of division of
supervision, improve the operating rules of financial activities and provide
relevant financial services, and investigate and punish relevant financial
violations in accordance with the law, so as to maintain a fair and effective
competition environment in the financial industry, prevent and resolve
financial risks, and ensure the safe and stable operation of the national
financial system.
1. People's Bank of China
The People's Bank of China is our country's central bank and is at the
core of the national financial institution system. According to the provisions
of the Law of the People's Bank of China of the People's Republic of China,
the People's Bank of China formulates and implements monetary policy and
supervises and manages the financial industry under the leadership of the
State Council. The head office of the People's Bank of China is located in
Beijing, and implements a four-level management system of head office,
regional branches, central branches and county and city branches. There is 1
Shanghai headquarters of the central bank, 9 regional branches (Shanghai,
Tianjin, Shenyang, Nanjing, Jinan, Wuhan, Guangzhou, Chengdu, Xi'an),
and
2
business management departments (Beijing, Chongqing), which are set up at the
prefectural (municipal) level
heart sub-branch, with sub-branches at the county (city) level.
2. China Banking Regulatory Commission
In April 2003, the China Banking Regulatory Commission (China
Banking Regulatory Commission (CBRC) was established, and the
regulatory functions of the banking industry were transferred from the
People's Bank of China to the CBRC. The CBRC is subordinate to the State
Council and under the authorization of the State Council to uniformly
supervise and manage banks, financial asset management companies,
trust and investment companies and other depository financial
institutions to maintain the legal and stable operation of the banking
industry. The purpose of the CBRC's supervision work is to protect the
interests of depositors and consumers through prudent and effective
supervision; Enhance market confidence through prudent and effective
supervision; Enhance the public's understanding of modern finance
through publicity and education and relevant information disclosure.
Efforts to reduce financial crime. The CBRC has set up 36 CBRC in all
provinces, municipalities directly under the Central Government,
autonomous regions and cities separately included in the plan, and set up
banking regulatory branches in prefectures (cities) and supervision
offices in counties (cities).
3. China Securities Regulatory Commission
In October 1992, the Securities Commission of the State Council and the
China Securities Regulatory Commission were established. In April 1998,
according to the State Council's institutional reform plan, it was decided to
merge the Securities Commission of the State Council and the China Securities
Regulatory Commission to form the China Securities Regulatory Commission
(China Securities Regulatory Commission). The China Securities Regulatory
Commission is subordinate to the State Council and is the regulatory agency of
our country's securities industry, which supervises and manages the securities
and futures industry in accordance with the law under the authorization of the
State Council, maintains the order of the securities and futures market, and
ensures its legal operation. The China Securities Regulatory Commission has set
up 36 securities regulatory bureaus in all provinces, municipalities directly
under the Central Government, autonomous regions and cities with separate
plans, as well as the offices of securities regulatory commissioners in Shanghai
and Shenzhen.
4. China Insurance Regulatory Commission
China Insurance Regulatory
Commission) was established on November 18, 1998, under the State Council,
and is the competent department of commercial insurance in the country.
According to the authorization of the State Council, the CIRC performs
administrative management functions, uniformly supervises and manages the
national insurance market in accordance with laws and regulations, and
maintains the legal and stable operation of the insurance industry. The CIRC has
set up 35 CIRC bureaus in all provinces, municipalities directly under the Central
Government, autonomous regions and cities with separate plans.
(2) Policy financial institutions
Policy financial institutions refer to financial institutions initiated,
funded, participated in or guaranteed by the government or government
agencies, and engage in policy financing activities in specific business areas
without the purpose of maximizing profits, so as to implement and
cooperate with the government's social and economic policies or intentions.
1. Export-Import Bank of China
Established in 1994, the Export-Import Bank of China is a wholly-owned policy
bank directly under the State Council and has an international credit rating
consistent with the national sovereign rating. The Export-Import Bank of China is
headquartered in Beijing. As of the end of 2012, there were 21 commercial
branches in China; Overseas, there are representative offices in Southeast Africa,
Paris and St. Petersburg; Correspondent bank relationships with the head office of
more than 1000 banks. The main responsibility of the Export-Import Bank of China
is to expand the import and export of mechanical and electrical products,
complete sets of equipment and high-tech products in our country, promote
enterprises with comparative advantages to carry out foreign contracting projects
and overseas investment, promote the development of foreign relations and
international economic and trade cooperation, and provide financial services.
2. Agricultural Development Bank of China
Established in November 1994, the Agricultural Development Bank of China
is the only agricultural policy bank in our country directly under the leadership
of the State Council. There are 31 provincial branches, more than 300
secondary branches and more than 1,800 business establishments in the whole
system, and the service network is all over Chinese mainland. The main
responsibility is to follow the laws, regulations, guidelines and policies of the
state, and to be based on national credit
Raise funds, undertake agricultural policy financial business stipulated by
the state, act as an agent for the allocation of financial support funds for
agriculture, and serve the development of agriculture and rural economy.
3. China Development Bank
Founded in March 1994 and headquartered in Beijing, the China
Development Bank was established on the basis of the original six national
professional investment companies, and most of its business was spun off from
China Construction Bank. As a policy-oriented industrial bank directly under the
leadership of the State Council, its main tasks are: implementing national
macroeconomic policies, raising and guiding social funds, alleviating
bottlenecks and weak links in economic and social development, committed to
promoting market construction and planning with financing, and supporting the
development of national infrastructure, basic industries, pillar industries and
high-tech and other fields and the construction of national key projects; Provide
financial support to social development bottlenecks such as urbanization, small
and medium-sized enterprises, "three rural areas", education, medical and
health care, and environmental protection to promote scientific development
and harmonious social construction. In line with the national "going out"
strategy, actively expand international cooperation business.
4. Financial asset management companies
A financial asset management company is a professional financial institution
established to maximize asset preservation and loss reduction, specializing in
the acquisition, management and disposal of non-performing assets divested by
commercial banks, and the implementation of corporatized operation. There are
four major asset management companies in our country, namely China Huarong
Asset Management Company, China Great Wall Asset Management Company,
China Orient Asset Management Company, and China Cinda Asset Management
Company, which receive non-performing assets divested from Industrial and
Commercial Bank of China, Agricultural Bank of China, Bank of China, and China
Construction Bank.
(3) Commercial financial institutions
Commercial financial institutions refer to financial enterprises that
provide various financial services, participate in market competition, and
maximize profits.
1. Commercial banking system
China's commercial banks can be broadly divided into the following levels.
(1) Four major state-owned commercial banks. The dominant position in
China's financial institution system has always been four state-owned
commercial banks: Industrial and Commercial Bank of China, Agricultural
Bank of China, Bank of China and China Construction Bank. At present, the
four major state-owned commercial banks are in an absolutely pivotal
position in China's entire financial sector, and are also in a relatively high
position in the ranking of the world's largest banks.
(2) National joint-stock commercial banks. After 1986, in addition to the
four wholly state-owned commercial banks, our country has successively
established a number of joint-stock commercial banks, such as Bank of
Communications, China Merchants Bank, CITIC Industrial Bank, Shenzhen
Development Bank, Fujian Industrial Bank, Guangdong Development Bank,
China Everbright Bank, Huaxia Bank, Shanghai Pudong Development Bank,
Hainan Development Bank (which was liquidated in 1998), China Minsheng
Bank, etc. Bank of Communications is the first national state-owned joint-
stock commercial bank in China; China Minsheng Bank is the first private bank
in China; Shenzhen Development Bank is the first listed company in China's
banking industry.
(3) City commercial banks. In 1995, the State Council decided to establish
city commercial banks in some economically developed cities. In February of
the same year, Shenzhen City Commercial Bank, the country's first city
commercial bank, was established. Unlike ordinary joint-stock banks, most of
the city commercial banks are merged from the previous more than 2,290
urban credit cooperatives, urban rural credit cooperatives and financial
service cooperatives (formerly known as "urban cooperative banks"
),
which are
composed of urban enterprises, residents and local financial investment. The
main function of city commercial banks is to finance the development of the
local economy, focusing on providing financial services for the development
of urban small and medium-sized enterprises.
(4) Postal Savings Bank. Postal savings refers to postal institutions that are
closely related to people's lives, handling savings and deposit business with
individuals as the main object while handling various mail delivery and
exchange services. June 26, 2006
Postal Savings Bank of China was approved and officially established on March
20, 2007, becoming the fifth largest bank in China.
(5) Rural commercial banks. Since the end of 2001, in order to further
promote rural financial reform, rural credit cooperatives in some areas have
been restructured into rural commercial banks, which are joint-stock local
financial institutions composed of farmers, rural industrial and commercial
households, enterprise legal persons and other economic organizations under
their jurisdiction.
(6) Village and town banks. Village banks refer to banking financial institutions
established in rural areas with the approval of the China Banking Regulatory
Commission in accordance with relevant laws and regulations, funded by domestic
and foreign financial institutions, domestic non-financial institution enterprise legal
persons, and domestic natural persons, mainly to provide financial services for
local farmers, agriculture and rural economic development. In terms of scale,
village banks are "small banks" in the true sense.
2. Securities industry system
(1) Stock exchange. A stock exchange is a tangible place for centralized
securities trading established in accordance with relevant national laws and
approved by the government securities authority. There are currently 2 stock
exchanges in the mainland: the Shanghai Stock Exchange and the Shenzhen
Stock Exchange.
(2) Securities companies. In our country, a securities company refers to a
limited liability company or joint stock limited company established in
accordance with the provisions of the Company Law and the Securities Law
and established with the review and approval of the securities regulatory
authority of the State Council specializing in securities business and having
independent legal person status. A securities company has membership in a
stock exchange and can underwrite issuance, proprietary trading, or
proprietary trading of securities. Ordinary investors must invest in securities
through securities companies. Securities companies can be divided into
securities brokers, securities dealers and securities underwriters according to
the functions of securities operation.
(3) Investment funds. Investment fund is a collective investment method
of benefit sharing and risk sharing, that is, through the issuance of fund units,
the investor's funds are concentrated, custodial by the fund custodian, and
the fund manager manages and uses the funds to engage in shares
bills, bonds, foreign exchange, currency and other financial instruments to
obtain investment income and capital appreciation. An investment fund is
an indirect financial investment institution or instrument, and its
mechanism is characterized by portfolio investment, risk diversification,
expert financial management, and economies of scale.
(3) QFII and RQFII. QFII (Qualified Foreign Institutional Invest) or the
abbreviation of qualified foreign institutional investors, the QFII mechanism
refers to the qualification system for foreign professional investment
institutions to invest in China. RQFII (RMB Qualified Foreign Institutional
Investors) refers to RMB Qualified Foreign Investors. RQFII overseas
institutional investors can invest in the domestic securities market with
foreign exchange settlement within the approved limit. The liberalization of
stock market investment in RQFII is to accelerate the internationalization of
the RMB.
(4) Intermediary service agencies. Intermediary service institutions
include securities depository and clearing companies, securities rating
agencies, securities investment consulting institutions, accounting firms, law
firms, etc.
3. Insurance industry system
On October 29, 1949, the Chinese People's Insurance Company was
established as the management authority of the insurance industry. After 1958,
the insurance industry came to a standstill. It was not until 1980 that the
Chinese Insurance Company resumed domestic insurance business and
vigorously carried out foreign-related insurance. In July 1996, the Chinese
Insurance Company was restructured into the Chinese Insurance (Group)
Company (hereinafter referred to as "China Insurance Group"). China Insurance
Group has three professional subsidiaries, among which China Insurance
Property and Casualty Insurance Co., Ltd. specializes in various property
insurance business, China Insurance Life Insurance Co., Ltd. specializes in long-
term life insurance and short-term life insurance business, and China Insurance
Reinsurance Co., Ltd. operates the reinsurance business within the system and
the group's external separation and in-in business, and acts as an agent for
national statutory reinsurance functions. The overseas insurance institutions
concerned continue to operate overseas insurance business as independent
entities directly under the China Insurance Group. China Insurance Group and its
three professional subsidiaries are all corporate legal persons, and China
Insurance Group invests in its subsidiaries in the form of holding companies, and
implements leadership, management and supervision. In October 1998, China
Insurance Group announced its abolition, and its three subsidiaries became
three independent state-owned insurance companies - Chinese People's
Insurance Company Limited (Property), Chinese Life Insurance Company Limited
and China Reinsurance Company Limited.
4. Other commercial financial institutions
(1) Trust and investment companies. A trust and investment company is a
financial institution that uses funds and other assets as the subject of trust,
and manages and uses trust assets as a trustee according to the wishes of
the trustor. As far as its trust business is concerned, it mainly includes two
categories: money trusts, including trust deposits, trust loans, entrusted
deposits, entrusted loans, pension trusts, investment trusts, pension
investment fund trusts, etc.; Non-monetary trusts, including securities trusts,
debt trusts, movable and immovable property trusts, business trusts, private
affairs trusts, etc.
(2) Finance company. Finance companies are the products of the
combination of the financial industry and industrial and commercial
enterprises, and are non-bank financial institutions that mainly operate
consumer credit and industrial and commercial enterprise credit. The
difference between finance companies and commercial banks in terms of
loans is: commercial banks borrow small amounts and lend large amounts;
Finance companies borrow large amounts and lend small amounts.
(3) Financial leasing companies. Financial leasing companies, also known
as financial leasing companies, refer to professional financial institutions that
mainly handle financial leasing business. our country's financial leasing
industry began in the early 80s of the 20th century. In 1981, China
International Trust and Investment Corporation established Orient
International Leasing Co., Ltd. and China Leasing Co., Ltd. When a financial
leasing company is created,
Most of them are jointly established by banks, other institutions and some
industry authorities.
(4) Pawn shop. Also known as pawnshops, it is an informal marginal
financial institution that specializes in issuing pledged loans, and is a market
intermediary organization that mainly focuses on currency lending and
supplemented by commodity sales.
(5) Credit service institutions. Such as credit reporting companies, credit
evaluation agencies, credit guarantee agencies, credit consulting agencies,
etc.
(6) Foreign-funded financial institutions in China. At present, there are
two types of foreign-funded financial institutions established in China: One is
the representative office of foreign-funded financial institutions in China. The
scope of its work is: conducting work negotiations, liaison, consulting, and
services, and shall not engage in any directly profitable business activities.
the other is the commercial branches set up by foreign financial institutions in
China.
(4) Cooperative financial institutions (rural credit cooperatives)
Cooperative financial institutions are a form of credit organization in
which people obtain low-cost financing and other convenient services in
economic activities, in accordance with the principle of cooperative system,
based on voluntary shareholding and personal property union, with
shareholders as the main service object, and with democratic management
of investors and joint labor as the business characteristics. Rural credit
cooperatives in our country are mutual aid and cooperative financial
institutions formed by members voluntarily raising funds. As a rural
collective financial organization, its characteristics are mainly reflected in
the fact that it is owned by farmers and democratically managed by
members, and mainly serves three aspects: human stock members.
(End)
