Speech at the Inaugural Meeting of China Great Wall Asset Management Co.,LTD

YangJiacai

December 11th, 2016

 

Today marks the establishment of China Great Wall Asset Management Co., LTD (GWAMCC), which not only wraps up the restructuring of the state -owned financial asset management corporation, but also is a most outstanding masterpiece. So, I would like to extend warm congratulations on behalf of China Banking Regulatory Commission.

 

Asset management companies (AMC) were established to resolve non-performing assets during the Asian financial crisis. They were born against the backdrop of economic downturn, grew up during economic upturn, and restructured in the boom period. Over the past ten-plus years, the four major AMCs have never been ashamed of disposing non-performing loans. They are like lotus, which “unsullied from mud, clean without demon” (It is from an ancient poem written by Zhou Dunyi in Song Dynasty). The AMCs are tenacious in face of non-performing assets, never overbearing in face of financial colleagues, and always unyielding in face of the risks and difficulties. They make great contributions to the reform, restructuring and listing of the state-owned financial institutions and state-owned enterprises. There is no doubt that the financial asset managers today are worthy of the admiration of the whole financial industry and even the state-owned enterprises, because it is they who swept out the historical residues from our business development and realized the achievements of our state-owned enterprises and state-owned banks, so that we could stand out in the world financial universe today. The ancient poet LiuYuxi in Tang Dynasty has written “Thousands of new peach trees in Xuanduguan Temple today, were all planted after LiuLangLiu Yuxi was sent away.” The trees are like the non-performing assets, if they were not cleared away, maybe there were no financial achievements anymore. Today, however, the situation could be concluded by another ancient poetry of LiuYuxi: “The cauliflowers would blossom after peach flowers fell, and Liulang came back again.” In the law of periodic breeding of non-performing assets, asset management companies are like Liulang who need to come back, and show their skills and talents. Therefore, we also hope that after restructuring, asset management companies could honor and stay true to their missions and the main businesses, supervise risks without relax, keep monitoring non-performing assets, and make greater contributions to the sound development of the financial enterprises and banking industries. Nowadays, the four AMCs are all restructured, and several local AMCs are established. After restructuring, AMCs are more powerful, more familiar with the technology, and stronger in ability. So when confronted with non-performing assets market, we have more tools to resort to.

 

Here we hope the AMCs focus on four major financial functions combined with their own business characteristics.

 

 (1) Focusing on assets purchasing and holding function, especially for the non-performing assets. We are supposed to actively participate in the acquisition, and hold the assets within a certain period of time, so that our financial markets could go through the difficulties. The purchasing and holding function mainly includes undertaking financial claims, transferring and holding enterprise equities, helping enterprises reduce leverage, liabilities and cost, as well as preventing asset price shrinking and reduceing market volatility through counter-cyclical asset purchasing and holding.

 

 (2)Focusing on asset restructuring function. By restructuring the stripping-off, purchasing, or fiduciary assets, reorganizing debts and enterprises, the allocation of social resources can be optimized and their value increased, thus the price will rise and the real economy will revive.

 

(3)Focusing on asset turnover. AMCs should become the most active asset dealers. We need to revitalize the capital market through acquisition in the primary market, transfer in the secondary market and the management of fiduciary assets. In the course of transaction, AMCs should be virtuous, and won’t hold for long the high-quality assets with the market demand, the outstanding debt or the high-quality shares over due, retire and retreat in time, so that the asset claims could return to the owners, production and market in time.

 

(4) Focusing on factoring function. It is known to all that AMCs are diversified financial enterprises with full licenses. The reason that they have so many licenses is to provide a comprehensive financial service which is factoring. Instead of competing with others, the purpose of AMCs is to serve the customers, to resolve non-performing assets and to serve for the main businesses. Therefore, we should give full play to these advantages and provide a series of financial factoring services for financial enterprises as well as industrial and commercial enterprises, such as asset trading, capital financing, credit assessment, credit guarantee, sales account management and accounts receivable management, so that banks and enterprises are able to concentrate on the main businesses

 

All in all, we hope the AMCs, especially the big four could take their own advantages of serving as the main conduits, together with local AMCs and other AMCs, and play an exclusive role in resolving non-performing assets for banks and enterprises, realize the two goals set by the CPC Central Committee led by General Secretary XI Jinpign, and make special contribution by the asset management industry.

 

Thank you!

atts:



Copyright: China Banking Regulatory Commission
ADDR:Jia N0.15 Financial Street, Xicheng District, Beijing, 100033