OREANDA-NEWS. April 04, 2013. Chen Yuan, the Secretary of the Party Committee and Chairman of China Development Bank.

This year is the start year to carry out the spirit of 18th National People's Congress comprehensively, the key year of connecting the past and future to implement "12th-Five Year" master plan, and also the important year to lay a solid foundation to build a well-off society comprehensively.

The 18th National People's Congress of the Communist Party of China made the ambitious goals of finishing the construction of well-off society comprehensively and deepening the reform and opening up, did a full deployment for pushing on the socialism with Chinese characteristics under the new era conditions, stressed the need to speed up improving the socialist market economic system, accelerated the transformation pattern of economic development, and promoted industrialization, informatization, urbanization and agricultural modernization to develop synchronously.

The central economic work conference put forward the overall tone to grasp the steady improvement continuously, taking the action of strengthening and improving macro-control, laying a solid agricultural base, speeding up the adjustment of industrial structure, promoting urbanization actively and steadily, enhancing the guarantee of people's livelihood and comprehensively deepening the reform of the economic system as the major task for this year. China Development Bank understands the spirit of Central deeply; unifies thinking and action into the judgments of the situation and the decision to deploy, grasps the opportunities firmly, faces challenges calmly, and elaborates the important roles of open finance to promote the sustainable and healthy economic development and social harmony and stability.

World Economy Enters into the Deep Transition and Adjustment Period

From the perspective of international, world economy has entered into the deep transition and adjustment period from the rapid development before the crisis, and this performs in the following ways:

The first is that world economic recovery processes are complex and variable, and the economic structure adjustment is speeded up. The power of United States investment and consumption demand growth remains insufficient; there is uncertainty in "fiscal cliff" issue. The European debt crisis is in the high-risk stage, and the Euro zone could be in fiscal and financial risks and the situation of vicious circle for economy recession. Debt problem of Japan is worsening, the ageing of society, hollowing industry and weak exports cause a broad economic downturn. Emerging market and developing countries are still the important engines for global economic growth. Even though they suffered the effects of the crisis, slight slow in economic growth, they are at the stage of accelerated development of industrialization and urbanization. The development potential is sufficient; thus they are still the important power to promote the world economy to develop toward more balanced direction.

The second is that the structure of the world economy enters into a period of adjustment, and all countries seek new advantages through adjustment and development pattern. The mold of excessive consumption of the developed countries developed for over time, over-loaded debt pattern was broken, and they seek to expand investment and export, revitalizing the manufacturing sector to restore economic growth. Exports from emerging market countries are affected by the crisis, and they begin to develop new economic growth points by expanding domestic demand. Resource-oriented countries strengthen the development and utilization of resources, extend the industry chain, and try to change the development model of solely depending on resources export.

The third is that the global competition is intensifying, and trade friction is in peak. Various forms of protectionism are on the rise, spreading from the trade to field of investment, technology, employment and so on. The competitions around talent, technology, regulations, standards and other aspects become intensely.

The fourth is that the science and technology revolution and industry change hatch new breakthrough. As a response to the crisis, seizing the commanding point of the future competition, all the major countries are speeding up the pace of technological innovation and industrial adjustment and upgrading; the third industrial revolution becomes the focus of attention. Developed countries such as the US and Europe promote the integration of information technology and manufacturing depth further; developing countries speed up the industry and technology with a comparative advantage, seeking to leap-forward development. Major scientific and technology breakthroughs and the industrial revolution caused by it will provide a fundamental impetus for the world economy stepped out of crisis.

Depth adjustment of the global economic structure automatically leads to profound adjustments in geopolitics and power relations. From the perspective of historical experience, the rise of emerging economies had always been suppressed by conservative powers. As the largest developing countries and the second large economic body in the world for our county, the status in global politics, economy, and diplomacy is increasingly improved; integrated strength is sharply upgraded; the resources and means of operating external relationship are more rich; the capacity of resolving various risks and contradictions enhanced continuously; we have full confidence to grasp the era theme of peace development, conform to globalization of historical tide, seek more large of development in more positive and active action of opening door to the outside world. As a national development finance institution for China Development Bank, it should know the situation clearly, overcome difficulties, and promote international cooperation business unswervingly, servicing both strategy overall situations of national security and development.

New Type of Urbanization is an Important Engine to Pull Chinese Economic

From the perspective of domestic, development of China is still in the period of important strategic opportunities, facing the historic task of promoting urbanization. At present, China's socio-economic development shows a good momentum of improvement in steady, and economic operation overall is smooth; in 2012, GDP exceeded 50 trillion Yuan for the first time, which increased by 7.8% compared to the previous year; and it was beyond the 7.5% of the expectations made in early of 2012; commodity prices are stability overall; structural adjustment is carried forward positively; people's lives are improved continuously. But the unbalanced, uncoordinated and unsustainable problems remain prominent, and downward pressure on economic growth is enlarged; the quality and efficiency of growth is not high, while the contradiction between economic development and resource environment is aggravated. We need to see the uncertainty of the situation and stage characteristics of economic development, enhancing consciousness of hardship and sense of urgency; we also want to see trend of China's development toward the good direction in long-term, work firmly, promote the confidence of development, determine accurately the connotation and condition change during the period of important strategic opportunities, as well as grasping opportunities comprehensively, meeting challenges composedly and gaining the initiatives, advantages, and the future.

For catching and making good use of the period of strategic opportunities, one of the crucial points is to promote urbanization without losing time. Urbanization is important part of building the well-off society, and it is also the important symbol of accomplishing the socialist modernization and the great rejuvenation of the Chinese nation. The Central has put the promotion of urbanization to the outstanding strategic position, stressing the need to take a new urbanization road, focusing on improving the quality of urbanization.

New type of urbanization will focus on people-oriented in a high degree, promote the citizenization for the transferred agricultural population orderly; attach importance to reasonable layout in a high degree, strengthen the renovation of territory and improve overall sexual of based facilities construction; focus on green and low carbon better, construct the resources saving and friendly type of environment city; focus on balance development of urban and rural areas, collaboratively boost industrialization, information, urbanization and agricultural modernization; this marks that urbanization of our county will enter into the new stage of keeping pace in speed and quality.

Urbanization involves infrastructure, industrial development, improvement of the people's livelihood, environmental protection and other aspects; it is a large and complex system engineering, which needs the support of a large number of medium-and-long-term funds. According to estimation, the rate of urbanization increases each 1%, the new added town people will be more than 13 million people, bringing investment and consumption needs worth of about 5.2 trillion Yuan. Not only that, the main battlefield of future urbanization will shift to medium and small cities and small key towns, where the promotion of urbanization is not only lack of funds, the shorter aspect is the institutional mechanisms for attracting funds to access constantly; this provides a broad space for developing finance to play the pioneering role of construction market that "when arrive at a hill, make a road, when arrive at the water, make a bridge".

Since 1998, China Development Bank has taken "Wuhu mode" as the opening, and been exploring financing advantages of government organizations and their combination, integrating resources from all sources, and promoting the construction of market-oriented financing platform, having created an effective method by the development finance to break the bottleneck of financing for urban construction, provided the urban construction loans accumulated to 2.68 trillion Yuan, led the local finance increase income of more than 4 trillion Yuan, and driven the average annual growth of GDP by 0.4%.

Under the support of development finance, the pace of China's urbanization is accelerated greatly, urban landscape has a bright and new look; town construction becomes the important engine to pull the sustained and healthy development of the economy. It can be said that development finance practice is started from supporting urbanization; at the same time, it is also continuously enriched and developed accompanied of urbanization construction in China. From the construction market by Bank-Government cooperation to advance planning to go ahead together, from solving the financing problems in cities and towns to supporting the "three rural" human livelihoods' development and expand international cooperation, every innovation of development finance is derived from the intrinsic needs of urbanization development; each successful practice tamps the foundation of urbanization, expanding the boundaries. At the same time, it also creates a broader space for development of China Development Bank. Facing to the new situation of urbanization, we should grasp the opportunity and seize up, play the role of development finance advantage and function, build the strong financial system to support urbanization sustainable, improve the financing capacity and efficiency; enhance the support to key areas and weak links, and continue to play the financial pioneer role in historic tasks of promoting urbanization.

Enhance the Capacity of Development Financial Services for Economic and Social Development
At present, the China Development Bank has been standing at a new historic starting point, facing the rare development opportunity. On the one hand, as the bridge and link between the Government and the market, development finance becomes the important lever used by the government to regulate and control the economy, and overcome the crisis, which is increasingly taken seriously and recognized by the parties. On the other hand, after more than 10 years' practice, China Development Bank has formed a set of effective model for supporting development and risk prevention, established the strong confidence in practice and theory for developmental finance, and accumulated experience and energy for further development. Under the new situation, the whole bank will set the higher goals and standards, look at our own work comprehensively, constantly improve our various capacities, and do all efforts to change the development opportunities into reality.

Firstly, improve the ability of innovation and development. Facing to the urgent need for economic and social development, particularly promotion of urbanization, financial services are not yet fully meet the requirements; financing bottlenecks still exist in areas including low-income housing construction and small and medium enterprises. With the accelerated process of interest rate marketization, financial disintermediation is aggravated and the competition for same trade is gradually increased; China Development Bank is also facing the development constraints by itself, such as size, sources of funds, capital and so on. To address these issues, the key is to rely on innovation, capture the inherent requirement for the development of the real economy, stimulate innovation interests further, and allow the way of crossing the river by feeling for the stones, make summaries, adjustments, improvements through pilot projects continuously, and to make innovation an eternal driving force for promoting the development.

Secondly, enhance the comprehensive management capabilities. In recent years, the China Development Bank has established "one for two" organizational structure, setting up the comprehensive operation brand; and it plays an important role in enriching service methods, expanding total amount of financing, optimizing the structure of income, and solving development challenges and other aspects; this becomes an important component of Bank's core competence. Also it should be seen that the depth and width of coordination between various business and between various institutions is urgent to be strengthened, comprehensive pricing and benefit-sharing mechanism have not been established, and the advantage of comprehensive operation has not yet to be fully realized. In next step, the China Development Bank will establish the integrated management concept, develop the potential of business collaboration, comprehensively use a variety of tools of investment, loan, debt and rental permits, achieve the integration of funds, mechanisms and strength between the parent company and its branch companies, form the overall force, take the common targets and concepts to serve economic and social development, and create more value.

Thirdly, improve risk management and control capacity. Risk control is the basis of China Development Bank. Over the years, we have strived to construct the most rigorous risk control system, making asset quality rank the international advanced level firmly for many years and achieving the unity of support for development and risk prevention. But we cannot meet the existing achievements. As the business expands continuously, China Development Bank is increasingly faced with different countries and regions and different industries and areas. The increase of the diversity and complexity, coupled with the expansion of the scope and improvement of the standards of financial regulation has an increasingly higher requirements for the risk management. We must insist on the principle of "Everyone is equal before the risk and everyone is equal before the truth", give full play to our subjective initiative, keep up with the changing situation and bank development and improve the risk prevention awareness and capacity practically, further optimize processes and integrate functions, build the complete, scientific and effective risk system and make up the blank of the system to make the system more mature and perfect.

Fourthly, improve the ability of team-building. The development of China Development Bank needs promisingly high-quality cadre troops with firm politics, high ability and fine styles. Every sector and whole staff have to establish a world-class high goal, enhance learning modestly, constantly learn from advanced institutions at home and abroad and from the same industry and the customers, continually open international view and develop strategic thinking to improve the capacity of dealing with complex environments; at the same time, establish the unified value idea of China Development Bank and build the enterprise culture; enhance everyone's sense of identity and sense of belonging continuously, inspire the whole staff to forge ahead, be innovated and work hard and strive for the developmental finance.

Increase the Support to Key Areas and Weak Links

In 2013, China Development Bank will continue to deepen the practice of financial development, adhere to planning in advance and innovation driving, produce the advantage of medium and long term investment and financing and comprehensive management, make supporting the urbanization the focus, continue to increase support to the "two bases and one support", people's livelihood, go out and other key areas and weak links, ensure the availability of funds, strengthen risk prevention and control and management control, further strengthen the leading role and service ability, and promote economic development sustainably and healthily and social harmony and stability. The following aspects are the focus:

Comprehensively support to grow steady, adjust structure and benefit people's livelihood. Firstly, support the development of the real economy by means of increasing the financing amount. Further deepen the cooperation with major customers, optimize the allocation of resources, lead the social funds to enter the key areas of energy, highway, railway and other key fields, and ensure the capital requirements of the national key projects under construction or continued construction and the new major projects of "Twelfth Five-Year". Strongly support the urbanization and the complement building, and increase new loans to account for more than 50%. Strengthen the support to the mid-west and northeast old industrial bases and the key national poverty alleviation areas.

Secondly, make promoting the adjustment of industrial structure as the focus to promote the transformation of economic development mode. Carry forward the major projects of strategic emerging industries and regional agglomeration development pilot, cultivate modern circulation and logistics industry, and vigorously support the development of cultural industry, science and technology innovation, the marine economy and national defense industry. Thirdly, make the mechanism construction and pattern innovation as the core; solve the financing problem in the people's livelihood field. Maintain the support to affordable housing project, grant 150 billion Yuan of loans in and out of the table annually. Strongly support the construction of water conservancy, promote the publication of national support policies together with the Water Conservancy Ministry and issue the loan of 60 billion Yuan in and out of the table throughout the year. Make supporting the construction of modern agriculture demonstration area as the focus, and ensure the national food security and the supply of major farm products. Speed up the construction of the small and micro businesses financing net and social financial service platform, and implement the support to the development of small and micro businesses.

Push forward the international business actively and steadily. Adhere to boost the big project through top management’ visit, and lift the force of China Development Bank’s diplomatic role in national economy. Focus on the overseas energy, resources, infrastructure and agricultural development, and form a virtuous roll of the development, reserve, review and issuance of major projects. Actively promote the business of project loan, and strive to achieve breakthroughs in cooperation, scope, content and other aspects. Implement the foreign exchange credit management responsibilities of the head office, branches, overseas institutions and the working group to achieve seamless linkage. Promote the establishment of branch offices in Asia, Africa, Western Europe and other key areas. In response to the need for international business development, further deepen the foreign exchange and training. Strengthen the overall management of the visiting group planning, and strictly control the uncertainty tasks of visits and compassionate visits.

Deepen the planning cooperation. Seize the opportunity of "NPC and CPPCC", move around the work thought in all places in new period, and start from planning the high-end providing financing services. Actively participate in the new urbanization planning work, promote the capital economic circle, Tianjin marine demonstration zone and other key regional planning rising to a national strategy, and do a good job of relevant systematic financing planning. Continue to steadily promote national planning cooperation and transnational planning work, integrate closely China's foreign aid program, bilateral planning formation and our international planning consultation and cooperation, and service and promote better China's economic diplomacy strategy. Strengthen the connection of customer planning and national planning and multinational planning, and promote the qualified projects in process though project supermarket, forum and other forms.

Do the diversified financing well. Formulate plans carefully to issue bonds, guide the market reasonably, stabilize the investors’ expectation, create a good environment to issue bonds and ensure the completion of the bonds issuance. Prepare the requirement forecasting of foreign exchange, raise foreign liquid assets through multiple channels, and spare no effort to guarantee the development of international business. Explore new sources of deposit funding, and promote actively the offshore RMB bond trading, bond issuance, currency swaps and other cross-border businesses. Strengthen the cooperation in syndicated loan, capital flows and joint lead manager and other businesses, and create a harmonious trade environment from two aspects of assets and liabilities. Strengthen the capital planning and allocation, perfect the refined and market-oriented fund management and comprehensive pricing management, intensify the pricing dominance in the long-term credit sector, and transfer the financing advantage of China Development Bank to support the development of the real economy.

Improve the comprehensive management brand. Perfect the teamwork mechanism among groups, enhance the coordination between the head office and branches, the parent company and subsidiary companies and among the subsidiary companies, and increase the potency dimension of linkage and the strength of interselling. Develop the intermediate business actively and steadily, and promote the development of high value added and low capital consumed products. Promote the off-balance-sheet financing actively, spread packet syndication and other innovation modes, research and promote the development of inter-market products, and expand the financing total volume. China Development Bank financing requires continuing to open fund-raising channels, increase the intensity of project development and make great efforts to prevent investment risks. China Development Bank securities shall make the core business stronger, expand the international business, promote the innovation business and strive to become the leader in the domestic securities industry relying on the cooperation and differentiation management. China Development Bank Leasing should strengthen the comprehensive operation inside and outside, improve the asset turnover, professional service ability and capital endogenous growth capacity. Sino-Africa fund should optimize the investment structure, strengthen the investment benefit, control the investment rhythm moderately, and improve the investment brand to Africa. Rural banks shall speed up the function and network construction and improve the operating performance steadily.

Strengthen the management, control and defusion of risks. The management of risks should be closely integrated with business development. Adjust credit policy timely, reinforce the risk analysis on the nation, industry, region and group customers, and make the pre-arranged defusion plan. Continue to strengthen the internal and external coordination, pay attention to the changes of the debt management policy of the local government, promote the transformation and healthy development of the financing platform actively through the cooperation between government and bank, planning consultation, financing lever and other ways, and promote the structural reform of the investment and financing system. Construct dynamic credit management systems actively, hold the bottom line of no systemic risk firmly, and consolidate the first-class credit performance. Do a good job of the management and execution of the foreign exchange contract, practice the on-site supervision of offshore projects, and scheme in advance the reclamation of the principal with interest of the foreign exchange loans. Enhance sensitivity and initiative, strengthen the public sentiment monitoring of the project, and make it an important reference for review and decision-making. Further strengthen the daily supervision, improve the off-site audit ability and audit results, promote the self-examination and rectification according to the most stringent standards, link work at selected spots with that in entire areas, do indefatigably, and promote the management compliant in real earnest.

Improve the operation guarantee ability. Promote the comprehensive benefit pricing for management accounting customers, deepen the guiding role of the budget management to the operating performance of the whole bank, perfect the financial supervision and the audit guidance of the group, study and establish long-term supplement mechanism of core capital. Strengthen the construction of the basic facilities for IT, speed up the completion of data production and disaster recovery pattern of "four locations and two centers", increase the potency dimension of the independent research and development, and promote the integration of the cross-department, cross-product line requirements, processes, data and systems. Centralize the operation supervision of the whole bank, go on with keeping the payment and settlement business safe, stable and efficient, improve the service quality to customers, and improve the supporting and guarantee capacity of operation business and the income-generating level of products.