Central Huijin Investment Corp, the central bank's investment arm, plans to
invest $40 billion in the Agricultural Bank of China, the Economic Observer
reported over the weekend.
The cash injection will be a big step in the
long-awaited shareholding reform of the bank, the last of China's "big four"
lenders that have yet to be listed.
The $40 billion will come from a
foreign exchange (forex) investment
agency to be set up soon. The agency will manage part of China's $1.33 trillion
forex reserve, the newspaper said, citing unnamed sources.
A month ago,
China's legislature authorized the Ministry of Finance to issue 1.55 trillion
yuan ($200 billion) in special treasury bonds to fund the setting up of the
forex agency.
The agency will use $65 billion of the total funds to take
over Central Huijin, the newspaper said.
The report gave no further
details, and Agricultural Bank officials were unavailable for
comments.
The central government set the tone for the Agricultural Bank's
restructuring at the beginning of the year, although detailed plans have not
been worked out.
But it is generally believed that the bank will follow
the restructuring steps of the other three big commercial banks: government
capital investment, dealing with non-performing loans, setting up shareholding
companies, introducing strategic investors and seeking opportunities for
listing.
"It's for capital investment, no doubt, but the amount is to be
determined by its financial status - how much it needs to peel off its bad
assets and raise its capital adequacy ratio to the regulatory requirement of
above 8 percent," Renmin University of China professor Zhao Xijun
said.
(China Daily 08/06/2007 page
1)
Vocabulary:
foreign exchange：外匯
Questions:
1. How much money is the
government planning to invest in the Agricultural Bank of China?
2. What
is a forex?
3. What is the regulatory requirement for the capital
adequacy ratio?
Answers:
1. $40 billion.
2. Foreign
exchange.
3. Above 8 percent.
（英語點(diǎn)津 Linda 編輯）
About the broadcaster:
Matt Doran is an award-winning American newspaper journalist and an
undergraduate student at Albion College. He is currently a polisher for China
Daily Website and is on summer break from Beijing Foreign Studies University,
where he will resume his study of Chinese in the fall.
Matt Doran is an award-winning American newspaper journalist and an
undergraduate student at Albion College. He is currently a polisher for China
Daily Website and is on summer break from Beijing Foreign Studies University,
where he will resume his study of Chinese in the fall.
