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China will introduce a series of policies and regulations to facilitate the smooth operation of financial asset management corporations (AMCs), according to a senior official.
Yang Kaisheng, president of China Huarong Asset Management Corporation (CHAMC), said Monday at the company's annual working conference that related departments are considering some policies and regulations, including to give a legal explanation on the purchase, management and disposal of assets by financial AMCs, put a premium on AMCs and reduce or remit AMC's administrative fees.
Previously, the State Council had issued a regulation governing financial AMCs and the State Administration of Taxation issued a circular to exempt AMCs from some taxes.
With the integration of the global financial market and China's expected entry into the World Trade Organization, more foreign capital will be utilized and the use of foreign capital in disposing of non-performing assets (NPAs) has drawn considerable attention, Yang said.
Huarong, the largest AMC in China, is set to carry out its long-term development strategy in four phases.
By 2000, the company had completed the first phase of purchasing of NPAs stripped off from the Industrial and Commercial Bank of China and had embarked on its second phase of managing these assets.
"In three years time, Huarong aims to dispose of 15 billion yuan NPAs and collect cash of 2.45 to 33 billion yuan," Yang said.
After that, the company will focus on investment bank business and the management of the Huarong's equities. The ultimate goal of transforming itself into an investment bank is expected to be realized in eight to nine years.
Currently, Huarong has a total assets of 500 billion yuan and holds more than 70,000 companies as its debtors, involving a quarter of the country's state-owned enterprises.
By last year, Huarong had disposed of 7.8 billion yuan in NPAs and retrieved asset of 3.2 billion yuan, including 2 billion yuan in cash.
(Xinhua 02/12/2001)
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