OREANDA-NEWS. March 03, 2011. Author: Chen Yuan, Chairman of China Development Bank.

Despite rapid economic development in recent years, China is facing the biggest problem of insufficient social development for which the lack of financial support is one of the major factors. The difficulties in financing for sectors concerning people's livelihood and welfare have not been addressed thoroughly, so there is an urgent need to give impetus to the improvement of people's livelihood by way of development finance.

As China's development financial institution, China Development Bank (CDB) is tasked with making up for the institutional deficiencies and market failures, breaking the financing bottlenecks and supporting the sectors regarding people's livelihood and welfare. This stands as not only its incumbent responsibility and mission, but also its active strategic choice in assuming social responsibility and promoting social development. Though there are thorny issues such as small single loan amount, heavy workload and harsh conditions, we should become aware of the significant historical and strategic implications of local financial business. We will cherish our true affection for people's livelihood and the important mission of promoting social development, and make our work benefit people's rights and interests and drive the social development.

The past five years has witnessed the continued expansion and innovation of CDB's local financial business from scratch. Specifically, CDB has gained the leading position in the banking sector in terms of the construction of indemnificatory housing and the issuance of student loans, becoming an indispensible financial force for people's livelihood in China.

The Chinese economy, in the transition of its growth model, needs a long-term mechanism for enlarging domestic demand and a new growth model that focuses on simulating domestic demand. In the current development phase, urbanization represents the greatest potential for China's domestic demand. Therefore, balancing urban and rural development and accelerating the urbanization pace bring huge room for the development of local financial business. Take the development of Sannong (farmers, agriculture and rural areas) services and the construction of new countryside for example, it is expected that the stock financing gap in the construction of new countryside and at county level alone amounted to RMB5.4 trillion in 2010. Moreover, the total number of government-subsidized housing for the Comfortable Housing Project will reach 45 million with a planning investment totaled 6.75 trillion Yuan in the 12th Five Year Plan period, which represents enormous financing demand and will bring CDB huge market potential following the urban infrastructure construction.

CDB is dedicated to turning market voids into commercially sustainable businesses and transforming people's livelihood from a weak link in the socio-economic development into a significant driver and growth pole, which are the important base and backbone for CDB's development as well as the unique capacity and core values of the development finance.