-- Chairman Tang Shuangning Addresses at the Asian Banker Summit 2007
November 22, 2007 ¡¡¡¡Mr. Emmanuel Daniel, President of the Asian Banker, paid a visit to China Everbright Bank (¡°the Bank¡±) recently. According to the original plan, he and I would meet for half an hour. We talked about concerned finance, the Bank, as well as how to act a good financier. I quoted a few words of Vinci, ¡°I am good at machinery, geometry, mathematics, anatomy ¡, and have a slight knowledge of fine arts¡±. I said the person only having some knowledge of banking was not a real banker, because a banker should be a philosopher, strategist ¡ My opinions interested him, and he was reluctant to leave after prolonging the talk for half an hour more. At parting, we stood up and continued to talk for 20 minutes. Just because of this, Mr. Daniel invited me to attend and deliver a speech at this meeting. Since it is a meeting of the banker magazine, I would like to give some account of the eight consciousnesses that a banker or a financier should have.
¡¡¡¡The first one is the consciousness of ¡°solipsism¡±. Financial development, management, reform, and opening should all adapt to the country¡¯s conditions and should be ¡°solipsistic¡±. In effect, the financial regimes of all countries not only have the general character, but also differ from one another. Just as what Leibniz has said that not two leaves are exactly the same in the world. It could be said that the financial management system of the US is the most ¡°chaotic¡± in the world, but it is most suitable to the conditions of the US and satisfactory to the society of the country. Accordingly, its financial management is best in the world. In the financial opening, what beneficial to us should be studied, and what harmful to us should be prevented. We can not be complacent and conservative, nor can we imitate others slavishly and thus lose one's individuality.
¡¡¡¡The second one is the consciousness of reverse thinking. All contradictory parties will convert towards a reverse direction according to certain conditions. Financiers must have reverse thinking, and learn to understand the trend, rather than look at the time. They should learn to look at tomorrow, rather than today. When the economic situations tend to be good, financiers should prevent possible financial risks; when the economy shows a downturn trend, they should consider taking the financial support measures. Presently, the economic situations are sound. Financial institutions, especially those with a medium and small size, should pay special attention to the rebound of credit risk. The stock market is also brisk at present, and financial institutions should guard against the bubble risk in advance, rather waiting for the happening of the risk. It is said that Bianque had two elder brothers. One day the King asked him, ¡°You and your two brothers are all skilled in medicine, which of you is the best?¡± Bianque answered, ¡°My eldest brother is the best, the next is my second brother, and the last is me.¡± The King asked again, ¡°Then how is it that you are the most famous?¡± Bianque replied, ¡°My eldest brother treats a disease when it is just beginning to show symptoms. What he does is to remove the pathogen ¨C members of my family can all see that but other people can not. That is why he does not enjoy wide recognition. My second brother cures a disease in its early stage. People thus mistake him as only capable of treating minor illnesses. So he is merely known within this locality and its neighborhood. As for me, I treat a disease when it is already well developed and very serious. People observe me performing bloodletting by injecting tubes into vessels or applying medical ointment on the skin, and thus look upon me as well versed in medicine. So I have become well known all over the country.¡± As a banker, we should have not only the ability of Bianque, but also that of his brothers.
¡¡¡¡The third one is the consciousness of diversification. Finance is a high-risk industry, and we should pay attention to the diversification of risks, because "eggs can not be put into one basket¡±. We should have a multi-currency arrangement for foreign exchange reserve, and should work out measures to diversify and prevent other financial risks, in order to hedge and mitigate risks as far as possible.
¡¡¡¡The fourth one is the consciousness of balance. Finance is a kind of state resources. Unbalanced allocation of financial resources will widen the gap between the rich and the poor and lead to the discontent of social members. The allocation of financial resources should depend on both the market and the government. It is necessary to take comprehensive advantage of financial, monetary, investment and market access policies to adjust the layout of financial resources, promote reasonable flow of financial resources, and balance the allocation of financial resources. As for China, it should establish a regional financial resource allocation system that combines the market with government support, to divert the excess liquidity in the eastern region and urban areas to the western and central regions and rural areas.
¡¡¡¡The fifth one is the consciousness of differentiation. We can not impose uniformity in all cases without distinguishing the differences between different financial institutions, different financial markets, different financial products and different financial risks. We should take into account not only the gross quantity, but also the structure, and analyze particular cases depending on the particular situations. The contradictions of different natures should be resolved by different approaches. As for the economic or financial issues of China, the major contradiction is not the gross quantity, but the structure. If the gross quantity is reasonable, the structure is not necessarily reasonable. If the gross quantity is unreasonable, the structure is bound to be unreasonable as well. If the structure is unreasonable, the gross quantity should be also unreasonable. Only when the structure is reasonable, the gross quantity can be really reasonable. The key to having a consciousness of differentiation is to address the structure issue.
¡¡¡¡The sixth one is the consciousness of interaction. In the financial work, scientific development is the objective, reform and innovation is the driving force, and supervision is guarantee. It may also be said that scientific development is the steering wheel, reform and innovation is the accelerator, and supervision is the brake. We should take them into comprehensive consideration.
¡¡¡¡The seventh one is the consciousness of transcendence. The international financial market has been changing quickly. China¡¯s WTO entry means the opening of the country¡¯s financial industry. Now our urgent task is to learn and quicken the pace of innovation. However, we can not always imitate other countries, we need to create conditions to transcend them. If backward nations tend to get beaten up, learning can only shorten but can not change the backwardness. Only trying to transcend based on learning, can we change the backwardness. Learning is a means, and transcendence is the objective. Transcendence could not be realized without learning, and learning may make no sense without transcendence.
¡¡¡¡The eighth one is the consciousness of taking overall situations into consideration. Finance is not only a quite important economic work, but also a chessman on the chessboard of the country. People engaged in financial industry, especially cadres, can not analyze finance in the context of finance. Instead, they should take a comprehensive view on finance. If the overall situation is the forest, finance is the trees. If the overall situation is a mountain, finance is a handful of soil. Forest is composed of trees, and mountain composed of soils. Financiers can not neglect trees and soils, nor do they overlook the forest and mountain.
¡¡¡¡The foregoing is some of my experience in the financial industry over the past dozens of years, and you are welcome to give your opinions on it.
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