OREANDA-NEWS. August 16, 2013. The publication of History of China Development Bank (1994-2012) took three years, from initiation, preparation, compilation and composition, to the final draft. The book, recently published by the China Financial Publishing House, has been meticulously compiled with several revisions. Reading the book, one gets the impression of an over 600,000-character extensive chronicle that has comprehensively, systematically, and accurately described the development process of development financing in China.

Among Chinese financial institutions, China Development Bank (CDB), which was officially founded on 17 March 1994, is the only bank bearing the word "National" [CDB's Chinese name reads "National Development Bank"]. "National" refers to CDB's government background and policy nature and indicates CDB's goal and purpose of serving the national economic development strategy, while "Development" incorporates China's national conditions as a developing country and shows CDB's unique positioning in the longer-term investment and financing field. The book clearly describes CDB's glorious journey of following its objective and sailing through the wind and the waves.

During the first four years after CDB's founding, CDB took up the heavy responsibility of exploring the development road for policy banks in China. At that time, the macroeconomic situation in China was complex and grave. On one hand, the excessive scale of fixed asset investment (FAI) needed to be readjusted, and on the other hand, there was a lack of funding for construction in infrastructure, basic industries, and pillar industries, which were in urgent need of support from development financing. Only founded recently, CDB became duty-bound to perform the duties and tasks assigned by the state, actively implemented the macroeconomic, industrial, and regional development policies of the state, used credit means to make adjustments to the lending projects in terms of total funding amounts and structures, and vigorously supported the infrastructure, basic industries, and pillar industries building, with significant achievements.

In fundraising and operations management, CDB boldly learned from foreign experience to explore setting up policy bank management system and operational mechanism. It engaged in fundraising through issuing financial bonds, established and enhanced the entrustment and agency relations with commercial banks, implemented separating loan approval from lending as well as strict management. As a result, the bank's operations went on the right track, and it quickly began making achievements in daily work. During those four years, 90% of CDB's lending went to electricity, energy, transportation, raw materials, electromechanical and textile, agriculture, forestry, water conservancy, and other key state construction areas. Key state projects that had a bearing on the national economy and the people's livelihood were launched one by one. The Three Gorges Project, Beijing-Kowloon Railway, Ling'ao nuclear power plant, and other projects successively started construction.

The year 1998 is a year of turning point in CDB's history. With the caution of the Asian financial crisis, financial risk prevention was unprecedentedly put on the national agenda. Facing a grim international financial situation, with the emancipation of the mind and thorough research, the new CDB management team boldly put forward the new thinking of working "under the market environment and within the bank framework" and pushed forward credit structural reform. First, the bank set up a "firewall" in project appraisal, adopted a series of measures including linking principal and interest recovery to project handling, examination, and lending in order to control the incremental risk. Then, CDB launched a second round of credit reform centered on managing the exiting risk. To cope with China's impending accession to the WTO, CDB started a third round of credit reform by putting forward the goals of the "eight standards" and the "five first-rate" aimed at turning CDB into a world-class bank, thereby beginning a new chapter in CDB's development history.

CDB led in getting out of the bank NPL "quagmire". Its NPL ratio decreased by the year, from 42.65% at end-1977 to 8.78% at end-2000. Its NPL ratio has been kept below 1% since 2005, reaching and maintaining an international advanced level.

CDB has firmly seized the period of opportunities in pushing forward urbanization building in China, starting with a loan of 1.08 billion yuan to support the start of urbanization in Wuhu, Anhui. The "Wuhu Model" flourished nationwide, and CDB has successively established a new type of bank-government cooperation with local governments, exploring a road of supporting urban construction with market means of financing, cultivating a financing platform, successfully solving the problem of China's urbanization financing, and giving a new look to many cities across the country.

Implementing the guiding principle of building a well-off society in an all-round way out forward by the central leadership, CDB has taken the initiative to assume social responsibility, and carried out innovation in launching people's livelihood related business such as emergency loans, SME loans, student loans, and welfare housing construction loans, allowing the vast numbers of ordinary people to gain practical benefits.

CDB has forged ahead to conduct business globally, with its various offices and work teams gradually covering over 100 countries and regions worldwide. Starting with the SCO Interbank Association to promote multilateral global financial cooperation, CDB has not only taken the initiative to serve China's "going abroad" strategy but also achieved development of its own international business by leaps and bounds.

In 2008, the US subprime crisis quickly evolved into an international financial crisis that swept the globe. On one hand CDB actively implemented the central government's series of policy measures including "ensuring growth, expanding domestic demand, and adjusting structures" in response to the international financial crisis, and on the other hand followed State Council arrangements for steadily pushing forward reform and transformation and actively exploring a new national policy financial system in line with China's economic and market development and with strong practicality and feasibility. On 16 December 2008, China Development Bank Company Ltd was officially launched. The post-transformation CDB experienced multiple changes such as diversified shareholding structure, corporatized governance, integrated banking functions, and market-oriented operations, all of which were enhanced to a higher and newer level. With over 8,000 staff members, today's CDB manages assets totaling over 7 trillion yuan. It is a world-class bank at home and abroad in terms of asset quality, per capita assets, and per capita income tax.

Reading History of China Development Bank (1994-2012), one can feel the in-depth history it tells and its usefulness as a lesson from history. The book speaks with facts and cases, compact and well-knit text, detailed and accurate information, and a strong sense of history, plus 60 beautiful color photos matching the book's content. Although CDB is less than 20 years old since its founding in 1994, this panoramic history of CDB is however an extensively composed grand chronicle demonstrating the responsibility and accountability of a national bank in serving the national strategy in vigorously supporting key state construction projects, creating a new financing model of bank support for key construction, paying attention to the people's livelihood, solving the financing needs of numerous households with wholesale means, standardizing development financing platforms, helping support the market in the face of international financial crises, developing global business, and achieving mutual benefit and a win-win outcome through international cooperation.

History recounts the past and shows the way to the future. An in-depth history of CDB has truthfully retold the extraordinary years of the past in CDB's development and reform. It is a history of practice about socialist market economy development and investment and financing system reform, a history of exploration about how development financing has supported key state construction and run the bank, as well as a history of struggle about CDB staff members being united, striving, and entrepreneurial in hardship as well as selflessly dedicating. One avidly reads the book, which provides much food for thought. CDB's exploration of development financing with Chinese characteristics has provided a historical lesson for building and enhancing a longer-term investment and financing system that is compatible with the development of China's socialist market economy. The book is a vivid textbook that has summed up the successful experience of development financing in breaking through the financing bottlenecks and cracking longer-term investment and financing difficulties in China.

The book's publication has carried forward CDB staff members' invaluable spiritual wealth, and it not only offers guidance for our daily work but also represents important value in the financial history.(The author is an editor and former chief editor at the China Financial Publishing House)