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.
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