Most of Chinese biggest banks are not real banks. These companies are not only commercial banks, but also parts of financial institutions. They are strongly supported by government and with the background of political power, these banks always make profits easily. “These banks’ revenues as a share of China’s economic output equaled nearly 3% last year, whereas the highest ratio achieved in recent decades by American banks was only 1% of GDP in 2006.”(data from reference article) Central government’s supports have played an important role in these banks’ fast growth.

However, currently, the motivation which has driven China’s four biggest banks to their high revenue goals is nearly breaking down. Although they are still profitable not, a wave of non-performing loans is coming, which will soon affect these banks badly. As the Chinese economic situation is being changed, the government is less willing than before to pour credit into these government-owned firms. Chinese big banks are becoming real institutions. which, in my opinion, in the next step of Chinese market reform. And it will reduce the monopoly of government-owned companies and make the whole market more active and open.

Reference:

http://www.economist.com/news/finance-and-economics/21584331-four-worlds-biggest-lenders-must-face-some-nasty-truths-giant-reality-check

Picture:

http://sgcomcsffile.s3.amazonaws.com/file/news/image/20130515/2d3cd7b2f74d3833ff9b4469f1140ae9.jpg

http://blog.thomsonreuters.com/wp-content/uploads/2013/08/china-banks-1024×733.jpg

This topic reminds me of the economic term “production efficiency”, the rise of the proletariat, and the development of social welfare system. It  is true that allocating resources as efficient as we can is the best way to maximize profit. However, when people become labors (or assets),  another form of resources, is it ethic to allocate them efficiently–to minimize their salaries as well as rest time and increase their working time? Here comes the most controversial part. A lot of people claim that there is no such thing as business ethics because the most primary goal of businessmen, or capitalists, is to earn money as possible as they can. Therefore, all the methods used to improve labors’ lives, even the social or company’s welfare with a name of ethics, is only for keeping them working and running the “production efficiency”.

It is wrong to say that businessmen don’t have any responsibilities to the whole society, including their workers and customers. However, when the ethics and business appear at the same time, it is hard for everyone to identify that is the business “ethical” or is the ethic an another form of “business”.

Information and resource:http://sethgodin.typepad.com/seths_blog/2011/07/no-such-thing-as-business-ethics.html

http://www.tutor2u.net/business/strategy/ethics-1.jpg

http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2012/11/8/1352380425594/Angel-and-devil-on-should-009.jpg

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