New York Special correspondent visits China Construction Bank Chairman Guo

"There are no tigers in the mountains," said the Monkey King.　　Mr Guo, chairman of China Construction Bank, used the quip to describe the current status of the banking industry in the United States.　　On the evening of June 5, at the opening ceremony of the construction Bank's New York branch, Mr Guo humorously quoted a similar Chinese proverb, causing more than 400 financiers and business leaders in the United States and China to laugh. In terms of market capitalisation and profitability, CCB is now the second largest listed bank in the world. At the end of the first quarter of this year, CCB's assets amounted to $1.3 trillion trillion, with a net profit of $3.84 billion in the first quarter.　　But the New York branch was its first branch in the Americas. Mr Guo said the establishment of the New York branch would have special significance for any bank that wants to be a world-class lender. The implication is that New York is the most developed financial market in the world, with a lot of information, technology and talent.　　After the establishment of a branch in New York, "CCB to obtain more information, learn more advanced experience, while the introduction of talent, training their own talent." CCB New York branch is located in New York Manhattan I. Avenue 1095th, will be mainly engaged in accepting large deposits, loans, trade financing, dollar clearing, capital transactions and other commercial banks.　　It is reported that the construction bank only to the New York branch sent 3 people, the other staff are on Wall Street recruitment.　　At the opening dinner at the New York branch, Mr Guo was interviewed by the reporter.　　Before long, CCB's strategic partner, the second largest shareholder, Bank of America, to make up the capital shortfall, sold its holdings of billions of U.S. dollar CCB stake. Mr Guo does not mince the matter.　　He said Bank of America still owns nearly 11% of CCB's stake, and remains the second largest shareholder, "this part of the lock is periodically until August 2011, before it is possible to sell." The sale of the bank's shares and other investors, "the impact is very small, I believe that we will not have a substantial impact."　　"Indeed, CCB now has a higher price than Bank of America," he said.　　Mr Guo briefly introduced the strategic partnership of two banks-over the past four years, two have collaborated on more than 100 projects, from retail business to network transformation, to corporate customer management, Cash management, managing money, risk management, and it. CCB vice President Yifei also said that after the establishment of New York branch, immediately faced many problems, such as financing, product design, especially the compliance requirements are relatively high.　　Bank of America can provide help in these areas. This help comes not only from learning about Wall Street's success, but also from its experience and lessons. "The lessons of Wall Street can prevent us from detours. This process is 10 years and 8 years faster than normal for our education because the problem is much more exposed.　　"said Mr Guo.　　But Mr Guo said the US banking industry was already mature and that foreign banks could not be replaced, and that CCB's advantage was within China. However, "our level of operation and ability, our profitability is likely to exceed the United States counterparts." Last year was a financial crisis.We are more than, in the future under normal circumstances we will be able to exceed, because China's market potential, economic growth rate is fast. "The financial services sector accounts for only about 5.7% of China's GDP, with more than 10% per cent in the United States."　　If all the labor force is counted, financial services may account for less than 1% of China's GDP.　　Compared with the United States, Mr Guo believes China's financial services industry has great potential, "and America's development has been a bit excessive".　　CCB can set up a liquidation account directly in the Federal Reserve, 21st Century: CIC recently made a 1.2 billion dollar second round of investment in Morgan Stanley. Mr Guo: no, we don't. CIC is different from us. We are commercial banks, they are mainly sovereign investment funds. I do not know their specific investment conditions, but I think because it is a sovereign fund, is the foreign exchange reserves, always have to invest. As a sovereign fund, the performance of CIC has been good so far compared to the world. Because they actually have a small share of the equity, it has 200 billion dollars, most of it is elsewhere, and a lot of it is cash. In terms of returns, they may have been the world's best sovereign funds last year.　　But as you know, financial markets are always risky. 21st century: When my colleague interviewed you in London, you said that the New York branch was primarily to defuse the bank's potential exposure to foreign exchange.　　New York Branch How are you going to do this? Mr Guo: This is a point, but not the main one. We first do the most basic service, such as the US dollar clearing system, which we have never had a direct relationship with the Fed, which used to entrust other banks; now we can set up a clearing account directly from the central bank, the main responsible for clearing the dollar, and we can do this by clearing the dollar transactions of all our banking systems.　　, very convenient. In fact, the annual liquidation of the dollar is many, because there are so many foreign trade, so many individuals go abroad, these transactions are the most important. Second, there is trade finance. Trade between China and the United States is developing rapidly, and more investment cooperation will be done in other areas. The third is the operation of some financial markets, such as valet trading, foreign exchange trading, gold trading, in Beijing, Hong Kong, London, New York can establish a 24-hour trading system to solve the problem of jet lag. There are many opportunities for our common customers to go out and serve.　　It's not necessarily the kind of risky, uncertain project that we're doing.　　The rise in commodity prices is indeed worth the attention of the 21st century: How do you judge the U.S. economy after you come over here and talk to your Wall Street peers? Mr Guo: I don't have much communication with Wall Street peers about the U.S. economy. When I was in Washington, I had some conversations with clients and companies in some American banks. What they're talking about is that in the last one months, the US real economy seems to be becoming more active, especially since small and medium-sized enterprises are beginning to consider whether toIncrease investment, do not buy raw materials, now the situation is improving.　　But I can't make a very clear judgment.　　21st century: Now that yields on long-term government bonds are rising and commodity futures prices are up, what impact will the global recovery have if this trend continues? Mr Guo: The market is naturally fluctuating and normal. Because the government's financial expenditure is very big, issuing more debt. There is an increase in expectations of inflation in the long term, so the yield curve becomes steep.　　But now, globally, the problem is not particularly big, after all, the economy is recovering slowly. However, the rise in commodity prices is indeed a matter for concern. As a whole, we still have a lot of resources to consume. In particular, like developed countries, these issues need to be addressed with China. America's GDP is about 23% of the world's, and its energy consumption is 23%, but its population is only 4.5%, and the consumption per capita is too great. If we all reach the level of the United States, the world is certainly unsustainable. So this is a big problem that needs to be treated together.　　Just don't look at the rise in short-term prices, which is a big problem in the long run. 21st Century: You think global imbalances are not the main cause of this crisis, but the current economic relationship between China and the US is indeed facing a transformation. US Treasury Secretary Geithner also raised the issue when he visited China a few days ago.　　As for Mr Geithner, what do you think of the transition to the economic relationship between China and the US? Mr Guo: I think we all need it. We still have a lot to do to expand domestic demand in China, especially to solve the problem of urban and rural co-ordination. Without solving the problem, there is a fundamental limit to expanding domestic demand. In addition, we have to increase service-oriented consumption and increase public services. This public service is also largely the result of urban-rural disparities. Basic medical care, basic education, especially compulsory education, should not be differentiated and public health should not be differentiated.　　But in fact our region is very different, this is a problem to be solved. The United States, I just said, its energy consumption, its way of life, we all drive, work far away, a lot of energy consumption; everyone lives in the suburbs, the house is very big.　　Although the United States is large in size, this energy consumption and lifestyle is unsustainable from a global perspective and is unsustainable from a market perspective. Regulators need to harmonize "21st century": you think regulation may be the main reason for this crisis. Now the United States is doing the financial regulatory reform. What do you think?　　How should regulatory reform be changed and what will be the impact of the reform? Mr Guo: first, the regulation of financial institutions and financial products as much as possible.　　There cannot be many deals outside the regulation, including derivatives and complex securitised products that should be regulated. Second, the regulatory bodies should be coordinated, unified, information-sharing, not fighting。 Because many organizations have conflicting functions, there are some things that we all have to deal with, and there are some things that nobody can control. caused a lot of loopholes, this is not good.　　So we have to unify. Third, with the internationalization of the development of cross-border transactions a lot, how to do global control, cross-border transactions to regulate, this is a big challenge. In the past, regulation was a matter of sovereign regulation and a country in charge of its own. I find it more difficult to form a global and unified regulation. This is a bigger challenge and a major topic for discussion at the next 20-nation summit.