Xiangxi Tujia and Miao Autonomous Prefecture Overview — Finance and Banking (III)
Section 3: Banking. Financial institutions in Xiangxi actively pooled construction funds, regulated currency circulation and supported industrial and agricultural production, fully playing their linking and leveraging role in socialist construction. I. Capital Circulation. Before the 'replacing native chieftains with officials' reform in the early Qing Dynasty, urban and rural capital circulation in Xiangxi was conducted among local indigenous residents, neighbors and clansmen...
This article has been compiled from historical materials in the "Zhangjiajie Tour Guide Network" (33519.com · City Overview section). Some administrative divisions, population, socioeconomic data, and policy information may be outdated and are for reference only; for the latest situation, please refer to official releases by the local government and scenic areas.
Section 3 Finance
The financial departments of Xiangxi Autonomous Prefecture actively pooled construction funds, regulated currency circulation, supported industrial and agricultural production, and fully played their role as a link and lever in socialist construction.
I. Fund Circulation
Before the "replacement of native officials with appointed officials" in the early Qing Dynasty, fund circulation between urban and rural areas within Xiangxi Autonomous Prefecture consisted entirely of private lending among local indigenous residents, neighbors, and fellow villagers, mostly interest-free or low-interest loans. After the Qianjia Miao People's Uprising, "camp accounts" and "guest accounts" appeared, and interest rates turned higher. According to the Yongsuí Subprefecture Gazetteer: "Camp accounts were lent by garrison soldiers; guest accounts were mostly lent by merchants from Hengzhou, Baozhou, and Jiangxi residing in the market. With 800 copper coins as one string, monthly interest was five coins. If not repaid by the third month, interest was immediately converted into principal. Counting a full year, interest turned over four times, and interest exceeded the principal several times. Interest money was collected by agreement when corn and miscellaneous grains ripened; or while the borrower was short, repayment was pressed, and fields were mortgaged... Often just after the autumn harvest was finished, there was not a grain left in the jar. Before this debt was cleared, another debt was incurred. After long exploitation, the fields were completely exhausted."
Financial institutions within the prefecture began in the Daoguang period of the Qing Dynasty. The earliest were pawnshops and money houses. In the third year of Xuantong in the Qing Dynasty (1911), the Dayong County Chamber of Commerce pooled shares to establish Fucheng Bank, the earliest banking institution to appear in the prefecture, but its scale was very small, and its management regulations still followed the old money house system. In the 21st year of the Republic of China (1932), the Xiangxi Rural Bank was established. It was jointly operated by officials and merchants, with its head office in Fenghuang and branches in various parts of Xiangxi, but it went bankrupt after only 4 years of operation. In the 27th year of the Republic of China (1938), the Hunan Provincial Bank established financial institutions within the prefecture and successively issued legal tender, customs gold units, and gold yuan certificates. Currency depreciated sharply and finally became almost worthless paper.
After the founding of New China in 1949, People's Banks were established successively in the 10 counties of the prefecture, beginning the establishment of a unified currency and credit system, issuing renminbi, strictly prohibiting barter, and strictly prohibiting the circulation of gold and silver dollars. In coordination with land reform and the struggle against local despots, gold and silver collection and exchange work was organized, allowing the renminbi to firmly occupy the market. The consolidation and enhancement of the credibility of the renminbi greatly developed bank deposit business. By the end of 1952, the deposit balance of the 10 counties in the prefecture was 6.15 million yuan, and the loan balance was 1 million yuan. In accordance with the policy of "going deep into rural areas, helping farmers, solving difficulties, and developing production," the focus of the People's Banks in the prefecture was in rural areas. In 1952, agricultural loans accounted for 32% of total loans.
During the First Five-Year Plan period (1953-1957), in accordance with the requirements of the general line for socialist construction of "developing the main body and transforming the two wings," the total credit volume and structure of financial institutions within the prefecture underwent considerable changes. In 1957, the balance of various loans reached 32.49 million yuan, an increase of 31.49 times over the end of 1952, and the deposit balance increased by 1.17 times over the end of 1952. During this period, the total scale of capital construction investment in the prefecture expanded 7 times compared with the three-year recovery period, powerfully supporting socialist transformation and socialist construction.
During the three-year "Great Leap Forward" period beginning in 1958, the financial system in the prefecture devolved institutions and personnel, abolished rules and regulations, reformed the credit fund management system, supplied funds without restriction, and implemented full-amount credit, thereby producing mistakes that led to reduced deposits, uncontrolled credit, excessive currency issuance, and chaotic internal accounts. In 1962, in implementing the Decision on Earnestly Strengthening the Centralized Unity of Bank Work and Strictly Controlling Currency Issuance by the Central Committee of the Communist Party of China and the State Council, credit, settlement, and cash management were strengthened, and currency issuance was strictly controlled, so that currency value gradually stabilized and currency credibility steadily improved. In 1962, capital construction funds in the prefecture were compressed to 1.16 million yuan. That year, the Prefecture Construction Bank was established, exercising fiscal functions and taking over the management of capital construction investment throughout the prefecture. Through strengthened management, capital construction investment in the prefecture was 15.46 million yuan, and there was no misappropriation of capital construction investment or undertaking of extra-plan projects.
During the 10-year "Cultural Revolution" period, the financial system in the prefecture was greatly impacted, financial business was once paralyzed, loans were extended without restraint, and currency issuance was out of control. In November 1977, in implementing the State Council's Several Provisions on Rectifying and Strengthening Bank Work, the financial system in the prefecture rectified banking institutions, replenished cadre strength, improved rules and regulations, and comprehensively rectified currency issuance, credit settlement, and account management. Various financial tasks were gradually improved and strengthened.
After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, the financial system in the prefecture implemented the policy of "adjustment, reform, rectification, and improvement" and the spirit that "banks must grasp the economy, banks must become levers for developing the economy and innovating technology, and banks must be run as true banks." Proceeding from reality, it carried out a series of reforms in the management system, credit system, fund management, foreign exchange, and insurance business. The financial cause entered a new period of vigorous development under the conditions of reform and opening up and the development of the socialist market economy, and truly became one of the levers of national macroeconomic regulation in building socialism with Chinese characteristics.
II. People's Bank
From 1950 to 1978, the financial system of the 10 counties in the prefecture was once dominated solely by the People's Bank. The People's Bank earnestly implemented the ethnic policies of the Central Committee of the Communist Party of China and the State Council. After the implementation of regional ethnic autonomy in 1952, the People's Banks within the prefecture charged ethnic minority farmers loan interest rates 25% lower than general regional agricultural production loan rates and 50% lower for agricultural and sideline production loans. From July 1981, preferential loan interest rates were granted to enterprises producing ethnic goods and to the commercial, Chinese medicinal materials companies, and supply and marketing cooperatives in counties implementing the "three items of care" in ethnic areas, with an interest differential of 0.9%, expanded to 2.7% the following year. In April 1985, it expanded to 3.3%, that is, charged at only half the loan interest rate of general areas. After 1987, the interest differential was 2.4%. From 1981 to 1990, the total loan interest reduced for the ethnic trade and supply and marketing systems in the prefecture reached 45 million yuan. From 1985, the People's Bank opened economic development loans for old revolutionary base areas, minority areas, border areas, and poor areas (also called special loans), with a preferential interest differential of 3%. By the end of 1990, interest had been reduced by 1 million yuan. From 1984 to 1985, the 10 counties in the prefecture twice implemented "two-cotton credit sales" for disadvantaged households in ethnic minority areas. The total amount of cotton cloth and cotton wadding sold on credit was 48.1 million yuan, and by the end of 1990, the amount of interest waived was 23 million yuan. In addition, 87.58 million yuan in work-relief funds were written off, fully demonstrating the state's care for ethnic minorities.
Since the reform and opening up, the financial system within the prefecture began to break away from the monolithic dominance of the People's Bank of China, successively restoring and establishing the People's Construction Bank of China, the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Development Bank of China, and the People's Insurance Company of China. On January 1, 1984, the People's Bank assumed macro-control functions. In 1985, People's Bank branches were successively established in Jishou, Dayong, Longshan, and Yongshun counties. Since 1984, the People's Bank has employed macro-control instruments such as statutory reserves, payment reserves, and relending to restrict the ability of specialized banks to expand loans and create derivative deposits. Through annual, seasonal, and temporary loans, it regulated the total credit volume and stock structure of various financial institutions. By the end of 1990, the relending balance of the People's Bank Jishou Branch reached 662 million yuan, accounting for 43.35% of the loan balance of the prefecture's financial system during the same period. Various financial institutions deposited reserves of 822.78 million yuan. In accordance with the requirements of "tight macro-control and flexible micro-management," the specialized banks conducted horizontal fund-raising and adjusted surpluses and shortages through the prefecture's short-term capital market and the financing cooperation networks within and outside the province within their respective systems. From 1987 to 1990, the total interbank lending of the prefecture's specialized banks reached 1.6 billion yuan. In 1988, as Dayong City and Sangzhi County were placed under separate administration, the People's Bank Dayong County Branch was transferred to the management of Zhangjiajie City.
In the 1990s, the People's Bank continued to implement the approach of "focusing on monetary policy objectives, taking the prevention and resolution of financial risks as the core, taking financial reform as the driving force, and promoting financial [development]." With the continuous deepening of financial system reform and the need for segregated financial supervision, on December 19, 2003, the banking regulatory function was separated from the People's Bank, and the Xiangxi Autonomous Prefecture Banking Regulatory Sub-bureau was established. The People's Bank assumed three major functions: transmitting monetary policy, maintaining financial stability, and improving financial services.
In 2005, following the approach of "strengthening quality through internal management and building image through external services," the bank implemented the Scientific Outlook on Development, adhered to both reform and innovation, and further promoted the development of the financial economy. That year, a cumulative total of 470 million yuan in agricultural support relending was issued, promoting financial institutions to issue bank acceptance bills of 306 million yuan, handle discounts of 129 million yuan, provide small-sum guaranteed loans of 1.935 million yuan for laid-off and unemployed persons, and student loans of 8.06 million yuan. By the end of December 2005, the deposit balance of financial institutions throughout the prefecture was 14.11 billion yuan; excluding 1.857 billion yuan in non-performing loans that were stripped off, the loan balance was 9.42 billion yuan.
III. Banking Regulatory Sub-bureau
On December 19, 2003, the Xiangxi Autonomous Prefecture Banking Regulatory Sub-bureau was established, specializing in the supervision of banking financial institutions. Over the past two years, in accordance with the Banking Supervision Law, it actively performed its regulatory functions, carried out on-site and off-site supervision, and maintained the orderly and sound operation of banking financial institutions within its jurisdiction.
IV. Specialized Banks
Agricultural Bank In 1955, during the agricultural cooperativization movement, the rural economy urgently needed the support of agricultural credit, and the development of rural credit cooperatives also required strengthened guidance from the state bank. In May of that year, the Xiangxi Autonomous Prefecture Central Sub-branch of the Agricultural Bank of China was established, operating jointly with the People's Bank. It was later abolished and restored several times. In October 1979, the Agricultural Bank was restored once again, after which the People's Bank and the Agricultural Bank divided their business and funds, adopted independent accounting, and assumed sole responsibility for their own profits and losses. In accordance with the instructions of the leaders of the CPC Central Committee and the State Council that "the Agricultural Bank cannot be run as merely an agricultural loan bank," the Agricultural Bank, in addition to handling various rural deposits and agricultural loans, strengthening supervision of agricultural appropriations, and guiding rural credit cooperatives, also handled rural industrial loans, loans for the purchase of agricultural and sideline products, and loans to the supply and marketing cooperative system. It also handled rural settlement business, regulated rural currency circulation, and carried out external financial cooperation, becoming a comprehensive bank handling all rural financial business. By the end of 2005, its deposit balance reached 2.72103 billion yuan, and its loan balance reached 3.08415 billion yuan.
Construction Bank In July 1962, the Xiangxi Autonomous Prefecture Sub-branch of the People's Construction Bank of China was established. It was abolished in October 1968 and restored in January 1973. Its business scope covered managing capital construction expenditures and budgetary finances, handling capital construction appropriations, settlements, and loans, and conducting financial supervision. In 2003, the Construction Bank system carried out shareholding reform. The Construction Bank Autonomous Prefecture Branch, in strict accordance with the requirements and arrangements of the head office and provincial branch, promptly and swiftly completed the specific preparatory work for the shareholding reform, ensuring that government orders were carried out without obstruction, prohibitions were enforced, operations were meticulous, and nothing went wrong. 2004 was a crucial year for the bank's shareholding reform. They confronted difficulties head-on and strove to transform into a modern financial enterprise with sufficient capital, strict internal control, a safe operating environment, and good service and efficiency. That year, the bank achieved a full-caliber domestic and foreign currency deposit balance of 1.88211 billion yuan and a corporate loan balance of 942.23 million yuan; the assessed book profit was 29.43 million yuan. In 2005, the deposit balance was 2.39291 billion yuan, and the loan balance was 1.43533 billion yuan, increasing by 27.21% and 30.57% respectively over the beginning of the year.
Industrial and Commercial Bank In October 1984, the Xiangxi Autonomous Prefecture Branch of the Industrial and Commercial Bank of China was established. This was a specialized bank in charge of urban financial business. Its main tasks were to raise social funds, strengthen credit management, support industrial production, expand commodity circulation, promote technological progress and enterprise technological transformation, and give play to the Industrial and Commercial Bank's role in fund regulation and redistribution in the national economy, in accordance with state policies, laws, and macro-decisions. Since 1996, the Industrial and Commercial Bank Xiangxi Autonomous Prefecture Branch has taken adjusting the credit structure, increasing effective input, and actively supporting local economic construction as the policy for the bank's credit work, adhering to the combination of loan facilities with the expansion of new economic growth points, the combination of loan input with support for enterprise production, and the combination of loan placement with the implementation of the quality customer group strategy. It focused on supporting the fund needs of key enterprises and "bottleneck" sectors of the national economy within the prefecture, successively issuing 5 billion yuan in loans to Xiangquan Group, Sanli Group, Xiyang Group, as well as tobacco, petroleum, electric power, telecommunications, and other enterprises, and issuing 760 million yuan in bank acceptance bills; in accordance with the state's ethnic policies, it issued preferential-rate loans with a balance of 300 million yuan to enterprises producing ethnic goods and engaged in ethnic trade within the prefecture, reducing enterprise interest payments by more than 50 million yuan; it established credit relationships with more than 70 private enterprises, with a private enterprise loan balance of more than 61 million yuan; it actively supported export enterprises in earning foreign exchange, with a loan balance of 13.03 million yuan; it launched consumer loan business, issuing a total of 91.86 million yuan in various consumer loans for home purchases, car purchases, student loans, and other purposes. By the end of 2005, the deposit balance was 2.90859 billion yuan, the loan balance was 1.66888 billion yuan, and the book profit showed a loss of 38.61 million yuan, a reduction of 13.43 million yuan compared with the previous year.
Bank of China In October 1988, the Jishou Sub-branch of the Bank of China was established. Its main business was handling RMB deposits, loans, settlements, and personal savings for foreign trade enterprises, export foreign exchange-earning enterprises, and foreign affairs enterprises, as well as handling foreign currency deposits, loans, foreign currency exchange, issuance of the Great Wall Credit Card, and payment of overseas Chinese remittances. In 2004, the Bank of China Jishou Branch, in accordance with the unified arrangements and deployments of the head office and provincial branch, completed the shareholding reform, confirmation of rights to idle assets, and legal due diligence on assets on schedule. Through loan write-offs and transfers, it disposed of more than 19 million yuan in non-performing assets, lightening its historical burden. At the same time, it changed its mindset and actively pursued marketing. That year, the bank's total assets reached 484.48 million yuan, an increase of 102.97 million yuan over the previous year. The deposit balance was 473.93 million yuan, an increase of 119.43 million yuan over the previous year; the loan balance was 415.04 million yuan, an increase of 81.52 million yuan over the previous year. Savings deposits and various loans showed good rapid growth, reaching the highest level in history and achieving catch-up development. By the end of 2005, the deposit balance was 534.09 million yuan, and the loan balance was 382.87 million yuan.
Agricultural Development Bank of China In September 1996, the Xiangxi Autonomous Prefecture Branch of the Agricultural Development Bank of China was established. Its main business was: issuing and managing loans for the purchase, storage, and transfer of grain, cotton, and edible oil as determined by the State Council; state special reserve loans for meat, sugar, tobacco leaves, wool, and other items; handling the allocation of central government subsidy funds for the above major agricultural products, opening special accounts for the grain risk fund jointly established by the central and provincial governments and handling allocations; issuing financial bonds; handling deposits and settlements of enterprises and institutions with accounts within the scope of business; and handling other business approved by the State Council and the People's Bank of China. In 2004, the Agricultural Development Bank Xiangxi Autonomous Prefecture Branch put the protection of farmers' interests, the protection of farmers' enthusiasm for growing grain, and the safeguarding of the authority and credibility of the Party and the state first. Taking policy implementation as the premise and credit risk prevention as the focus, it actively responded to changes in the situation, continuously adapted to the objective requirements of grain market-oriented reform, and, centering on the comprehensive completion of various business management objectives and tasks, gave prominence to standardized business management, continued to strengthen closed management, adhered to a people-oriented approach, improved the quality of its workforce, and successfully completed all tasks centered on the closed management of purchase funds. Throughout the year, it issued a cumulative total of 68.51 million yuan in grain and oil purchase and transfer loans. By the end of 2005, the loan balance was 551.36 million yuan, an increase of 6% over the same period of the previous year; the non-performing loan balance at year-end was 5.15 million yuan, a decrease of 68% from the beginning of the year; and the book profit was 9.73 million yuan, the first profit since the bank's establishment.
Credit Cooperatives In the 26th year of the Republic of China (1937), the Hunan Provincial Agricultural Finance Bureau established the first batch of 17 credit cooperatives within the prefecture in Qiancheng (present-day Jishou). In the 29th year of the Republic of China, there were 555 credit cooperatives in the 10 counties of the prefecture. In the autumn of the 38th year of the Republic of China (1949), all county credit cooperatives disappeared. In 1953, 333 credit cooperatives were successively established in the 10 counties of the prefecture, organizing rural savings deposits of 2.55 million yuan. After the people's commune movement in 1958, the role of rural credit cooperatives was greatly weakened, and during the "Cultural Revolution," most credit cooperatives were paralyzed. After 1978, rural credit cooperatives entered a new stage of historical development. In 2005, the 8 counties and cities of the prefecture had a total of 8 county-level cooperative unions and 217 credit sub-units. The deposit balance of rural credit cooperatives throughout the prefecture was 3.026 billion yuan, and the loan balance was 2.359 billion yuan. All 8 cooperative unions achieved profitability, with a total profit of 41.61 million yuan.