- Government plans to close down more than half of trust and investment companies in 2000
- invest in risky projects (real estate) while paying sky-high interest rates
- Mergers and closures
- No. of trust is near 400 (in 1994)
- no. of trust is about 230 (in 1999)
- At least 50 years in history
- support local economic development
- enhance daily lives of communities
- collectively owned and have independent accounting and operating performance
- business- receive deposits/give credit, execute settlement and remittance transactions for private industry
- provide funds to small or medium size enterprises
Credit Cooperatives - Two problems with cooperatives
Rural Credit Cooperatives - Exists in every rural township in China
- By September 1998, more than 50,000 rural credit cooperatives
- a quarter of million village credit stations
Urban Credit Cooperatives (UCC) - Gain popularity in 1990
- End 1998, 3200 UCC
- 80% of credit given to private enterprise of SMEs
- Central bank has developed strategies to merge UCC with urban cooperative banks
Pension Funds - 1997, The Unified Pension System Reform Law was set up to enforce a mandatory pension programs for part of the population
- Not yet allowed pension funds to invest in securities market
- The only country in Far East not have a private fund cover.
Managed Funds - Shenzhen Investment Fund Management - first domestic fund manager in China, set up in 1992
- Investment choices are bonds and publicly issued stocks
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