Chinese Banks

Back to writing about China…we are in our last month here, and still have much to report on.

This post is about Chinese banks….there are so many banks here, it is difficult to know where to start.  The obvious bank to start with  is the Bank of China (well-named!).  When you see the skyline of Hong Kong, it is the iconic building, designed by I.M Pei, with the many triangles…also criticized as all these straight lines are not good “Feng Shui.” Image

You would think that this would be China’s biggest bank chain, but, no, it isn’t.  That would be ICBC, the Industrial and Commercial Bank of China, the world’s largest bank.  There are so many banks in China, one has to ask, “Why?”  All these banks must be for the Chinese to put all their money in.  We all have heard how much money the Chinese have now.  So how much do Chinese people save?  “The most credible estimate places China’s household saving rate for 2007 at nearly 26 percent.” (,1)


How does this compare to the rate of saving in the US?  “U.S. savings rate falls to zero. The personal savings rate hits its lowest rate since 2001 as Americans put their faith in the rising value of their home.” (…/USSavingsRateFallsToZero)  So, the Chinese save more.  We guess that’s the reason for all of the banks.  There are over 36,000 banks and credit unions here in China (Wikipedia).

There is the state or government-owned bank, the People’s Bank of China, along with the “Big Four” banks:  Bank of China, Chinese Construction Bank, the Agricultural Bank of China, and the Industrial and Commercial Bank of China (ICBC); the state-owned commercial banks that manage all of the government’s money.  Then there are all of the provincial banks, city banks, and foreign banks.  The interesting thing is, the government has ultimate control of ALL of these banks, even foreign banks.  The state retains a 51% share of these banks, so even though you can buy shares in these banks on the stock exchange, the Chinese government is still the major share-holder. (Wikipedia)  So there is no question about regulation, or bank fraud, unless the government is doing the fraud (?).  That is one of the advantages of a “totalitarian” government.  As we know the Chinese have most of our money, and it is in all of the these banks.  Our question, though, is, why do they need so many banks, if the government has the ultimate control?  We don’t have the  clear answer to that question.

The banks do have many of the amenities of regular banks in the US.  They issue bank-cards or debit-cards.  In fact, for a place where credit-cards are not that popular, there are over 1.89 billion debit-cards in use (Wikipedia), more than one for each person in China!  We have a debit-card, issued from our bank here.  So, obviously, the government wants people to be able to access their money and spend it…got to keep that economy going!  Banks are open 7 days a week here, no problems on Sunday…religion is not an issue!  There are ATMs everywhere, with minimal charges…the banks do not need them to make money!  All banks here use a system similar to the Department of Motor Vehicles; you go in, get a ticket with a number on it, sit down until your number and window are called, then go to that window and get service.  All the tellers who handle money are behind glass, and they have pocket windows to hand money through, so no bank robberies unless you can shoot through the glass, but wait, no one has guns here…so why the glass?  Guess it must be because the weapon of choice is a knife of cleaver, so that’s the what the glass is for!

Within a block of where we live there more than a dozen banks, with new ones being built…that’s what many of the new buildings going up are…more banks!

So think of all this the next time you complain about the banks at home and the fact the Chinese have all of our money…what are they doing with it?   It’s sitting in their banks!  Moving China ahead!


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