On Friday, Wu Xiaolin, deputy governor of the PBoC, came to the Peking University campus for a presentation.I didn’t attend because my Chinese is not good enough to make it worthwhile, but my ever-alert assistant Oliver Shang tells me that one of her statements that caught his attention was a comment about “small loan companies”.According to Oliver, she talked about the development and importance of the system of microfinance China, which he takes to mean mainly the companies that provide micro loans to agricultural families, saying "we will work on and make the small loan companies become legal soon"
I am getting all of this second hand, so I don’t want to make too much of this, but I have been thinking a lot about the informal banking system in China – especially as I suspect that one of the consequences of the renewed attempts to constrain credit growth may be to divert funding out of the commercial banks and into the informal sector, where there are neither loan caps or minimum reserve requirements.I presume “legalizing” these banks means brining them into the regulatory fold.
I would be curious if readers of my blog have other information about the activity of the informal banking sector.
Hi professor, I guess the Deputy Governor you referred to should be Wu Xiaoling instead of Wu Xiaolin. Regarding informal banking sector, I was not at the presentation, but to me what Wu mentioned sounds like rural financial reform of China, something like China's Grameen Bank, offering loads to the poor.
RedFive, you are right -- Xiaolin must be her kung fu cousin. Thanks for the correction. Twofish, I love Kellee's book and found it tremendously useful, but her research was completed by the very early part of this decade, and so includes nothing on the recent money surge. If during your trolling through data you find something more recent please let me know.
Michael Pettis is a professor at Peking University's Guanghua School of Management, where he specializes in Chinese financial markets. He has also taught, from 2002 to 2004, at Tsinghua University’s School of Economics and Management and, from 1992 to 2001, at Columbia University’s Graduate School of Business. He is a member of the board of directors of ABC-CA Fund Management Co., a Sino-French joint venture based in Shanghai.
Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups. He has also worked as a partner in a merchant banking boutique that specialized in securitizing Latin American assets and at Credit Suisse First Boston, where he headed the emerging markets trading team. Besides trading and capital markets, Pettis has been involved in sovereign advisory work, including for the Mexican government on the privatization of its banking system, the Republic of Macedonia on the restructuring of its international bank debt, and the South Korean Ministry of Finance on the restructuring of the country’s commercial bank debt.
Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean’s Advisory Board at the School of Public and International Affairs. He is the author of several books, including The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (Oxford University Press, 2001). He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University.
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Comments (3) for "Wu Xiaolin on small loan com...
- 12/16/2007 7:27 PM
October, 2007