Finance Articles

Progress and Frustration in China's Banking and Petroleum Industries

(PRWEB) June 14, 2007 -- Perhaps the two domestic industries that have yielded most reluctantly to market oriented reforms in China, the banking and petroleum industry, have recently shown encouraging signs of progress. At the end of last month, and in the first application of China's last, and arguably most important, WTO mandated banking sector reform, four foreign-owned banks were approved as locally incorporated entities. The much-anticipated reforms and their implementation effectively enable the foreign banks to operate freely in the Chinese marketplace and offer a nearly unmitigated range of financial service products without the former geographic, currency and client restrictions. Citigroup, one of the approved foreign lenders, has already announced robust plans to almost double its current number of branch outlets by the end of the year.

The laudable reforms and their successful realization should bring significant and tangible benefits to the Chinese banking sector, the average Chinese saver as well as local and foreign enterprises. As foreign banks establish China-based practices, their imported familiarity in developing sound credit cultures in line with international best practices will do far more for China than somewhat appease her foreign trading partners through greater market access and opportunities to rebalance their import/export ratios. Foreign commercial banks that loan and invest prudently, to maximize profit and in accordance with fundamental principles like creditworthiness, will nurture promising domestic enterprises, reward customers with favorable deposit rates and innovative financial options and, lastly, serve as a powerful competitive catalyst for China's massive state-owed banks to relieve themselves of cumbersome, government-informed directives.

These banking reforms have further paved the way for China to more sincerely embrace an economic regime fueled by free, uninhibited competition and founded on the voluntary exchange of goods and services--empowering not stymieing the human inclination to create, initiate and invent. Progress on the petroleum front, though present, has been slower and measurably more sheepish.

While noting remaining obstacles and obvious contradictions in the market, Chinese media outlets have called the allowance of foreign oil wholesalers in the market de facto market regulation. This seems misleading. Though foreign enterprises may now apply for and putatively attain wholesale licenses, China's tightly controlled pricing mechanism effectively precludes foreign entry. Upstream wholesalers cannot, on market terms, compete with China's two vertically integrated, state-owed, petrol giants (Sinopec and CNPC). If the vast majority of the country's supply is controlled by non-market-oriented firms that can--indeed are instructed--to import and retail petroleum products at losses, this is a marketplace entirely void of market forces.

Whereas banking reform initiatives have, since WTO accession, deftly provided foreign operators with, at minimum, a market niche, i.e., foreign currency business, petroleum-related reforms have been continuously structurally beset by the artificial retail pricing mechanism. Foreign competitors, whose operations are naturally dictated by market influences, will have little to no room to maneuver in a market effectively insulated from international prices. New wholesale opportunities and other upstream restructuring, while encouraging in concept, will likely do little to attract foreign players. The Ministry of Commerce's (MofCom) March issued guidelines additionally requires all wholesaling entities to have a "one-time annual crude processing capacity of over 1 million metric tons" as well as "an oil product depot with a minimum storage capacity of 10,000 cubic meters." The MofCom regulations additionally stipulate that import licenses be applied for and obtained independently of wholesale licenses, further complicating market entry and adding additional variable elements. Requirements of this kind coupled with such highly uncertain profit prospects does little to practically encourage foreign participation and serves to effectively perpetuate SOE predominance.

Monopolies, by their nature, obstruct competition. China's petrol monopolies are, if anything, more obstructive in nature than most as Beijing is their majority shareholder. Ostensibly, of course, the new reforms are intended to liberalize what has been a relatively closed and protected industry, though whether these are the necessary first steps to more comprehensive market reforms is unclear. There seems to be an accompanying element of the arbitrary that pervades opening an economic sector that remains so heavy regulated, subsidized and insulated. China's petroleum industry today looks much like her banking industry 10 years ago. Similar institutional interests and obstacles, however, were overcome in the latter's case and it is today positioned for successful international integration. The former is moving frustratingly slowly.

###

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

The Holy Grail Of Private Banking Has Been Found
As a middle aged, middle class, married, business owner, father of 3 (one in college&.argh) freedom seeker, I have sought for many years to establish the knowledge, the relationships, and the resources needed to make a lifestyle of financial privacy and freedom available to me and my family. One of the most frustrating and problematic areas to resolve successfully has been that of how to establish a private banking relationship, for someone of moderate means, in todays world of intrusive financial surveillance. Many have found that without doing something shady or under the table or downright illegal, and having to constantly be looking over your shoulder to see who is looking, having a workable private banking solution is, in real lif...

Are You Paying Too Much For Your Mortgage Protection?
If you have bought your mortgage protection from a high street lender or bank, then the chances are that you are paying far too much for your mortgage protection. The good news is that you may be able to cancel your policy, and go to a standalone provider for your insurance.

Obelisk Says Bulgaria is World Leader for Property Investment
Bulgaria property investment has proven to be the country's economic driver with a record-breaking turnover of ?11.36 billion in 2007.

NEFE, Colleges Educating Students on Personal Finance
New Online Resource Offers Relevant Information

Banzai Launches Personal Finance Web Application Aimed at Cash-Strapped Consumers
Banzai prepares consumers for an economic downturn by offering a hands-on approach to personal finance with a focus on controlling spending and getting out of debt.

Mortgage Investors Corporation Offers Solutions for 'Foreclosure Boom'
The recent weeks and months of foreclosures and lending operation failures in the United States have eroded the American dream of home ownership more so than at any time in recent history. Mortagage Investors Corporation offers viable solutions for lenders and home owners to avoid the tragedies of foreclosures.

BD Nationwide Mortgage Introduces the Second Mortgage that Requires NO Appraisal for Home Equity Loans to 125% and Refinancing Credit Lines
BD Nationwide Mortgage introduces the "Fast Fund Second Mortgage Loan" that requires no formal appraisal. The latest second mortgage product from BD Nationwide reduces the funding times for home equity loans, because underwriting accepts an automated value model rather than a URAR or 2055 appraisal that requires a licensed appraiser to visit, survey, and appraise a property and the comparable properties. In most cases, automated value models eliminate about 10 days of the home equity loan process by waiving the formal appraisal. The AVM accepted with these second mortgages takes the loan officer about 20 seconds to complete for most properties.

New Mortgage Rules Protect Consumers, Risk Removing Credit, Housser Says
Bills.com co-CEO Andrew Housser addresses subprime lending crisis.

NetGain Year-End Report - The Affect of Record Crude Oil Prices on Real Estate Investment
NetGainRealEstate.com has released a proprietary and in depth report on the affect of record crude oil prices on commercial real estate investment. The carefully documented analysis provides essential information for all parties involved with income property.

Mortgage Lenders In San Diego Can Bring You Closer To Seals And Navy Seals
You spot the huge creature standing in the distance as it raises its lengthy trunk straight up into the air. It starts trumpeting. The deafening sound it makes is no jazz, that's for certain. Then, the enormous mammal points its 400-pound tusks at you and its 15,000-pound body charges towards you! Your mind tells you to move, but your body refuses. The beast runs closer and closer, until you find yourself peering into the eyes of true terror. And then, suddenly, it slows down! The creature extends its trunk, which is powerful enough to knock down trees, towards you. You quickly reach into your pocket, pull out a handful of peanuts, and then uncurl your fingers towards the animal. The elephant happily uses its trunk to suck them up like a va...

Mortgage-Refinance Treachery: Avoid Mortgage Bankers and Brokers Biggest Trick -- The Sales Pitch
What the average homeowner or home buyer fails to realize is that bankers, loan officers, mortgage brokers, or whatever your lenders call themselves, are salesmen. Certainly, if you purchased your home from a realtor and used her lender, you most likely got a feeling of trust in that person, because the realtor referred him.

Real Time Hot Mortgage Leads
The fresher the lead, the better the quality, so it makes sense that Real-Time mortgage leads are the hottest they come. Think about it, mortgage borrowers looking to refinance or do some home improvements find a broker that is looking to give them a great rate, perfect match?

When To Re-Mortgage
If you are struggling to keep up with mortgage payments, or just feel you are paying over the odds on your home loan, then re-mortgaging may be the answer. It can give you lower monthly payments and even save you money in the long-term so there is little to be lost from at least exploring the possibility. But once you have decided to re-mortgage, where do you start?

Is Interest Only Mortgage A Good Option
 An interest only mortgage is a form of mortgage, where the borrower will pay nothing but the interest for a limited period of time. Unless the person makes an additional payment above the interest that needs to be paid, nothing is paid towards the principal amount. Only the interest is paid for a fixed period of time, which is usually around 5 or 10 years. Once this period is over, the loan is then amortized and for the rest of the term, the interest is paid along with the principal amount. Now comes the important question, whether borrowing on an interest only mortgage plan is a good option or not. An interest only mortgage option is generally preferred by some people, who would expect their career to improve over a period of tim...