China in focus f 3 International Shanghai San Francisco Hong Kong Mexico City Lumpur Djakarta Santiago de Chile ISSUE 35/14 NOVEMBER 1994 The PRC is in the process of gradually shifting towards a more market-oriented economy. How would you describe the current economie situatïon? China is developing very quickly. It is one of the fastest growing countries in the world. Three years ago, there were only about 25 foreign fmancial institutions in Shanghai. Now, there are already more than 120. For me, seeing all these changes is very exciting. But I have also seen problems evolve during this period - rising inflation, inadequate in- frastructure and legislation, and many other things. Generally, however, I feel quite posi- tive about economie development here - people have benefitted from it and their Stan dard of living has improved. And that makes a real difference. You mentioned inadequate legislation. Does this make it easy or hard for foreign banks to operate in China? I think most foreign banks would agree doing business is not easy here. Under present re- gulations, for example, rep offices are only al- lowed to employ local personnel via two government department - the Foreign Econ omie Service Company (FESCO) and China International Intellectech Corporation (CIIC). Another problem is the restriction of our scope in doing business. Foreign banks are not permitted to do local currency (RMB yuan) business in any form. In addition, laws and regulations are not transparent enough and that tends to complicate life even more. Rabobank's presence in the Pacific Rim. So what kind of products can foreign banks offer? At the moment, we can offer forex products, such as corporate finance, project finance, syndication loans, import-export transac- tions, and so on. But economie reform in China means opening up the local currency market will be unavoidable. In the early stages this will mean limited business in that area, such as local currency lending and deposits. Are these opportunities likely to increase in the longer-term? For a long time, China has been talking about opening the local currency market to foreign banks. In view of the PRC's application to re- enter GATT, I expect some of the re-entry conditions will include the improvement of Olivia Guihua Chen (1964) obtained her Bachelor of Econ- omics from Shanghai Institute of Foreign Trade (SIFT) be- fore joining the IPB program of the University of Nijenrode in the Netherlands and completing her MBA there. After working for a number of Chinese institutions, induding an assistant professorship at SIFT, she returned to the Nether lands to join VOC. She was then appointed VOC sales re presentatie in Shanghai before moving to ABN AMRO, first as assistant representative and later as corporate finance ac count manager. She joined Rabobank in August this year. Chen is married with two daughters and speaks Chinese, English and Dutch. policy transparency and the introduction of a more market-oriented banking system. This would mean foreign banks could operate on the same level as local institutions. As a con- sequence, potential business opportunities will increase for foreign banks. What are your short-term aims as Rabobank rep? As you know, Rabobank has been trying to en ter the Shanghai fmancial market for many years. Originally, the intention was to set up a joint-venture with the Shanghai branch of the Agriculture Bank of China. Ultimately, this did not happen, but the goals remain the same. As the representative, I will be putting my efforts into establishing and developing relationships with local banks and clients and to provide services for our existing and po tential customers in terms of trouble-shooting and consultancy. This will improve market awareness of Rabobank and will enhance our lobby to obtain a branch licence here. Another aim is to provide sound economie and fman cial intelligence which could serve as policy and strategy reference material for both head- office and the whole network. Last but not least, to find good staff and organize the train ing they will need in preparation for our fully- fledged branch operation. Do you already have clients, or will you be focusing on researching the potential market before aefining products? Yes, we do have clients. In this respect, our Hong Kong branch has been doing a good job. Sjouke Postma, who is also the chief rep of our Shanghai office, has been active in China's financial market for years and has al ready established a number of contacts. Our Shanghai office will certainly continue to ser vice these clients. At the same time, we will also carry out some market research in order to define any possible future products. Are you able to offer products from Shanghai, or is this aspect taken care of by Hong Kong? Representative offices in the PRC are not legal entities in themselves. As a result, they are not allowed to conduct business in the way a branch does. Not surprisingly, there will de- finitely be a very close cooperation between the Shanghai office and our Hong Kong branch. You are Rabobank's first woman in a very senior position. In some Far-eastern countries, ie. Hong Kong and Singapore, it is not uncommon to find women at the highest management levels. What is the situation in the PRC? Quite honestly, I did not realize that. In China, there is a famous saying (by Chairman Mao): women can support half of the sky. I grew up with this idea. Over the years, I have received a very good education, not only in China, but also in the Netherlands. So I take a position like this more or less for granted. But I have to admit that as a woman, you have to put extra effort into achieving something, even in China where 'the sky is supported equal- ly by both men and women'. Sometimes, I hear people joke: the sky is indeed equally supported by both sexes, but not equally divided between them'. Maybe that is not such a bad description of the situation here in China... IGAPORE Rabobank's Shanghai representative Olivia Guihua Chen talks us through the current economie situation in the PRC and outlines prospects for the future. afeSfa- HT-.J ■-

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blad 'Raboband International' (EN) | 1994 | | pagina 3