China's Macro-Economic Control Measures and The Effect on Banking and Industry

David Kiang
Vice President, Shenzhen Ping An Bank

An AmCham conversation with James Sun,
AmCham China Business Committee Co-Chair

China Business Committee and Financial Services Committee

As inflation rises to an uncomfortable level, China is implementing biting measures to cool its economy, measures that come with substantial pre-Olympic infrasture spending and rising energy and commodity prices. Beyond these external factors, China's worst winter in decades has crippled agriculture production, cut electricity and industrial output and halted transportation in many provinces, pushing prices up. At the same time, Beijing set a stringent program to slow credit growth including measures to control banks' lending and higher deposit reserves. New labor contract laws boost labor costs across industries, worsening labor shortfalls in many regions. The constant strengthening of the RMB against the U.S. dollar worsens manufacturers' margins.

How can industries cope with such pervasive trends? How will they affect the banking sector, coming out of years of restructuring? Mr. Kiang will draw upon over 20 years' experience in China banking to discuss how the dual impact of rising inflation and ever-stringent macro-economic control will affect China's banking and industrial sectors. He also will discuss the future of foreign banks in China.

Mr. Kiang is a Vice President and the Executive Management Committee member of Shenzhen Ping An Bank, and a member of the People's Political Consultative Council of China's Jiangsu Province. He earned B.A. and M.S. degrees in aeronautics and astronautics from MIT and an MBA from Harvard. Working in aeronautics in Canada before switching to banking in New York, he has been based in Asia since the mid-1970s. He has held top posts in Citibank, Dao Heng, First Interstate, Bangkok and Standard Chartered banks, and was COO for Citic Ka Wah Bank and North Asia MD for NM Rothschild. He joined First Sino Bank in Shanghai in 2001 as Vice Chair and CEO. He received a "World Manager Achievement" award in 2005 and "China's 10 New Outstanding Leadership Award" in 2006.