Photo: A China Construction Bank's branch in Hong Kong.
China Construction Bank (
The
modern history of China started out tumultuously when Imperial China was
overthrown in 1911 and the Republic of China was created. However, opposing ideologies soon led to a civil
war that was fought intermittently between the Kuomintang (Nationalists) and
the Communists from 1927 to 1937, when both fractions oddly joined forces to
fight the Japanese invasion, which became part of the World War II. Sadly, when China emerged as one of the
victor-nations at the end of global conflict, the civil war resumed in 1946
until 1950, when the Kuomintang government’s Republic of China retreated to
Taiwan, leaving mainland China to the Communists, who had established the
People’s Republic of China one year earlier in 1949.
As
part of the Communist China’s state economic plans, the People's Construction
Bank of China was established in 1954 as a wholly state-owned financing agency under
the direction of the Ministry of Finance to administer and disburse government
funds for the construction of infrastructure-related projects.
In
1979, under China’s new ‘open-door’ policy to modernize its economy and to promote
manufacturing and foreign trade, the People's Construction Bank of China became
a financial institution under the direction of the State Council and gradually
assumed more commercial banking functions that are typically associated with
the Western-capitalist definition of a bank.
Throughout
the 1980s, China Construction Bank gradually became a full-service bank, offering
more and more personal banking services for individuals while maintaining its
other mandate of financing state-planned infrastructure development. This finally changed in 1994 when
state-policy-driven, infrastructure-related financing functions were
transferred to the newly-created China Development Bank.
In
1996, the People’s Construction Bank of China was renamed China Construction
Bank. By this time, China had been
gradually transforming itself from a pure communist state to what it described
as the Chinese-style Socialism: basically a form of socio-political system that
is roughly half-way between the 1950s hard line communism and the Western capitalist
democracy. Under this Chinese-style socialist
market-economy is a system that is still largely state-planned
and controlled, but with a semi-market-driven decision-making process; goods
and services are largely produced by state-owned enterprises yet with partial
private investment and ownership.
Increasingly, individuals are allowed and even encouraged to own
personal properties, assets and investments. Yet, unlike the Western capitalist
democratic system, universal suffrage is not allowed.
China
Construction Bank became a joint-stock commercial bank with limited liability in
September 2004 as China prepared to partially float its Big Four state-owned
commercial banks on the stock market. To bring the bank’s Tier 1 capital level to the internationally-accepted
level of 8%, the Chinese government is said to have injected USD $22.5-billion
into China Construction Bank in 2003. Meanwhile, ownership
of China Construction Bank and other major state-owned banks and financial
services firms was transferred to a state agency called Central Huijin Investment
Ltd.
As
China was still inexperienced in managing its own stock exchange, securities
underwriting and regulation, essentially all of China’s major state-owned enterprises
were initially floated on the Hong Kong stock exchange instead of a Chinese
stock market during the early 2000s.
Following a HKD
$71.5-billion (USD $9.2-billion) stock sale, China
Construction Bank's class ‘H’ shares were listed on Hong Kong Stock Exchange on 2015-10-27, and on 2007-09-25, the bank's class ‘A’ were
listed on Shanghai Stock Exchange, raising another CNY 58-billion (USD $7.7-billion).
Recent
transaction(s):
- In 2006, China Construction Bank bought Bank of America's Hong Kong retail banking operations for HKD $9.7-billion (USD $1.25-billion).
- In November 2014, CCB bought 72% of Brazil’s Banco Industrial e Comercial S.A. (BicBanco) for USD $723-million (BRL 1.62-billion). BicBanco specialized in lending to medium-sized businesses through 38 branches in Brazil and one in the Cayman Islands. The bank had 900 employees.
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