Throughout the economic downturn China has kept huge numbers of people employed by starting massive infrastructure projects. They’ve built hundreds of miles of high-speed rail, started construction on new subway lines, and have worked on improving the freeway system. It seems China has all the infrastructure it could ever need, maybe even more than it will need for a while.
However, there are three areas that seem decades behind where they should be for a superpower, and we’ll be looking at them over the next few days.
Banks- The bank is my least favorite place in China. It is the pinnacle of Chinese style bureaucracy, with piles of pointless paperwork and regulations that are impossible to understand.
A few examples:
Paper work – When my friend Kyle went to close his bank account in Pingxiang (near Longzhou) he brought his passport and bank book (an ancient banking method in itself), but he forgot his ATM card. The bank refused to close the account without the card. Pingxiang was an hour away, so he decided to draw all but the last few RMB and leave the account open, which it still may be to this day.
When it was time to close my account at that branch I had to sign 8 papers and enter my PIN 5 times; I lost track of the number of stamps that were used.
Regulations – The next year in Yizhou I managed to save up a decent amount of money (for rural China), but I was moving to Chengdu. My account was at the Construction Bank of China, which is one of the major banks. My friend Mary though told me that I had to withdraw all the money and take it with me, and then open a new account there. It turned out I would have had to pay a fee any time I took money out of the account from another province.
Like most things in China, the banks are only just barely connected. Even at the largest banks, the branches act more like separate institutions.
At the moment this banking system is causing headaches for the National gov’t as they try to reign in housing prices by limiting the number of mortgages a person can hold. Individual branches rarely communicate between cities, let alone between different banks; which makes it next to impossible to track loans. I also can’t imagine trying to run a business through Chinese banks, if personal banking has caused me so many problems.
Part Two looking at how this trend affects health care.
Part Three looking at the trends that limit effective govt.
China is now world’s second biggest economy. They must get the banks into the 21st century! I hate the Chinese banks too and have only ventured into them with a Chinese friend to interpret the system for me. On my last visit to Beijing, November 2010, I took Yuan with me, even though the exchange rate was poor – 9.55 Yuan to £1 Sterling. The convenience of using a British Bank and organising the money online made the transaction worthwhile! Love the blog and v.interested in health issues too.
At this point I don’t deal with the banks. I have a US account that doesn’t charge ATM fees internationally. Also when I get RMB for something I just stash it in my apartment.
I’ve heard horror stories about people wiring money back to the US and the bank in China “loses” it.
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The banks are managed by people. In China one deals with people, not laws. One has an implied interpersonal relationship with one’s bank manager – your buddy that you didn’t know about. That relationship doesn’t travel to the next city. Now that you understand, that warm friendly fuzziness that you’re suddenly feeling to your banker, or the place that sells you time on your cell phone, is wholly out of place in another Province. Buddies are only buddies when they buddy up together – Confucianally.
I agree completely with these ideas, but it doesn’t exactly make for an efficient way of doing business.
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[…] Biggest Hurdle Posted on February 16, 2011 by Tom We’ve seen how limited interconnectedness and a lack of communication have been causing problems in China’s banks and hospitals. Today I […]