Former CDB chairman publishes new book
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E-mail China.org.cn, November 8, 2013
Preface
As this book goes to press, I find myself moved by a sense of both fondness and pride – for I do believe that this is indeed a very special book.
A book is not made special by its heftiness or length, of course, but rather by the weight that its words carry. This book is in many ways a record of the long and often difficult journey that has marked the progress of development finance in China. Many obstacles have been overcome along that path: skepticism and resistance from those unfriendly to change, and complex challenges from the market itself. Ultimately, it was firm conviction and great courage at each step along the way that allowed development finance to prevail in its quest.
This book attempts to examine development finance from a number of angles:
• CDB's transition from policy lender to development finance institution;
• bank-government cooperation in market development;
• financing models for urban development (the Wuhu Model);
• strategic planning;
• market-based approaches and government mandate;
• financing rebalancing of the economy;
• support for agriculture and rural development;
• inclusive financing for social well-being;
• win-win international cooperation;
• the future of development finance.
In each section, I share my personal account of CDB's experience with development finance, as well as a collection of essays and interviews that may offer some further illumination. As a whole, the book serves as a distillation of my insight into and reflections on development finance from over a decade of practice and exploration.
My lifetime passion for finance and economics was inspired by my father, Chen Yun, who dedicated his life to economic policy-making in the first decades of the People's Republic of China. My career in public service has taken me from local assignments in Beijing's Xicheng district and municipal governments, to senior posts at the PBoC, the central bank, and eventually at CDB; my work has ranged from local administration to financial policy-making and regulation and now to development finance. It is this trajectory – from local to global, from micro to macro, from theory to practice – that allowed me to bring to CDB a diversity of experience and understanding of China's broader circumstances, and inspired me to link CDB's financing capabilities with the government's strengths in coordinating resources. It is precisely this combination that lies at the heart of development finance's contribution to growth and social progress.
I realize that the very term "development finance" comes across as distant and abstruse to some, but the truth is that it's dynamic and alive, bursting with vitality and creative energy. For more than a decade, day in, day out, development finance has been reshaping the face of China's cities and countryside, strengthening its infrastructure, building partnerships around the world, benefitting countless small to medium-sized enterprises (SMEs), millions of students on financial aid, and tens of millions of low- and middle-income homeowners. Development finance touches everything around us in China, and it is a present and powerful force in all of our lives.
Development finance is a form and methodology of finance; it is a product in a uniquely Chinese context. It provides medium- to long-term financing in pursuit of a national development agenda. Using marketbased practices, development finance leverages sovereign credit to break through bottlenecks in social and economic development while enhancing financial stability and economic competitiveness. At its core lies a joint bank-government effort to develop markets – turning market gaps and deficiencies into active, sophisticated market sectors, and thereby laying the foundations for economic and social sustainability.
As a pioneer of development finance in China, CDB establishes innovative financing models for priority projects on the national agenda, successfully applying development finance practices to business planning, cooperation with local governments, SME-financing, support for social progress, and backing for Chinese businesses to expand overseas.
CDB has received valuable support from the government, business community, and public at large. Just as CDB has catalyzed economic growth and social progress across China, so too have our local partnerships enriched our own experience and growth as a bank. Our approach has been internationally recognized for its effective adaptation of the world's most sophisticated financial methodologies and practices that are then tested and refined in actual market practice. To date, CDB is not only China's leading medium- to long-term financier, but is also the country's largest bond-issuing bank, largest cross-border financier, and the single largest development finance institution in the world.
Amid profound shifts in the global economic and political landscape, China's role in the world economy continues to expand, and the task set before development finance looms ever larger. Development finance represents a theory bound to practice; it has tremendous potential to grow within China and across the world. It is my hope that this book will provide a greater understanding of development finance as it has been practiced in China and inspire my colleagues to devote further consideration to its theory and application. Such efforts can help development finance make an even greater contribution to the well-being of China's economy and community.
That, in essence, is the ultimate intention and purpose of development finance, and also the intention and purpose of this book.
Chen Yuan, Beijing
July 2012
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