China Development Bank

 

Updated on November 2017

Nature and Purpose

  • China Development Bank (CDB) was created in 1994. In the same year, two other banks were created: Eximbank and Agricultural Development Bank of China.
  • CDB provides medium and long term financing aiming at the development of the development of China’s economy economy, focusing on the following areas: national infrastructure, primary industry and urban and regional development, mainly through financing to small companies,  rural investment and environmental initiatives.
  • CDB is an integrally public bank, under the responsibility of the State Council of the People’s Republic of China.
  • The Bank has 38 offices (including its Hong Kong office) and five offices abroad: Cairo, Moscow, Rio de Janeiro, Caracas  and London.

 

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Source: The author, based on CDB 2016 Annual Report

Where do resources come from?

  • CDB has four shareholders: the Ministry of Finance, Central Hujin Investment Ltd., the National Council for Social Security Fund and the Buttonwood Investment Bank.
  • The Ministry of Finance is a unit of the State Council. It consists of the administrative and regulatory body responsible for managing fiscal revenues and expenses. Its activities include the formulation of budgetary and fiscal policies and financial supervision.
  • Hujin is an integrally state-owned limited society, constituted in conformity with the Company Law of the People’s Republic of China. With authorization from the State Council, Central Hujin Investment Ltd. fulfills the role of investing in the main state-owned financial institutions, within the limits of its contributions and in conformity with applicable laws and regulations.
  • The National Council for Social Security Fund is a governmental agency responsible for the management and  functioning of the National Social Security Fund. It is under
    direct leadership and supervision of the State Council, or an authorized Department by the State Council.
  • Buttonwood Investment Bank was created in 2014 and belongs to China’s State Administration of Foreign Exchange. Its objective is to diversify channels of investment of China’s foreign exchange reserves. In July 2015, it made a capital injection of US$ 48 billion and acquired 1,59% of CDB’s shares.
  • A large part of funds raised by the bank comes from the issuance of debt bonds: Besides Treasury bonds and CDB’s own bonds, the bank has launched a series of new products and obligations.

 

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Source: The author, based on CDB 2016 Annual Report

 

Chart by Visualizer

Source: The author, based on CDB 2016 Annual Report

 

Chart by Visualizer

Source: The author, based on CDB 2016 Annual Report

How does it work?

CDB has six subsidiaries, distributed throughout the national territory:

 

1. CDB Development Fund was created in August 2015 with a social capital of US$ 7 billion and the main objective of supporting the construction of projects in key-sectors for economic development recognized by the state. The investment is conducted via capital investments, loans to shareholders and investment and financing to company funds. This subsidiary represents the greatest innovation
of the reform of Chinese financial market and investments.
2. CDB Capital Co., was created in 2009, with a focus on urban development, industrial investment, foreign investment and funds management. In 2015, its social capital surpassed US$ 15 billion. It is the only investment institution licensed for investing in RMB in the Chinese banking system, and is defined as one of CDB’s platforms to serve
national strategies.
3. CDB Leasing Co., was created in 2008, with a social capital of US$ 1.25 billion. It operates with leasing in the fields of aviation, naval construction, transport, commercial vehicles, engineering equipment, basic infrastructure industry, social housing and small and medium-sized enterprises. In 2015, it registered a social capital of over US$ 21 billion.
4. China-Africa Development Fund, was created in 2007, for investment operations and consultancy for Chinese companies in Africa.
5. Village Bank operations are concentrated in the rural economy of China. In 2015, the bank invested directly in 13 village banks as subsidiaries.
6. CDB Securities Co., was created in 2010, and its activities include: Mergers and acquisitions, subscription of securities, brokerage businesses and asset management. In 2015, its total assets reached over US$ 6 billion.

 

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Source: The author, based on CDB 2016 Annual Report

 

Chart by Visualizer

Source: The author, based on CDB 2016 Annual Report

 

Chart by Visualizer

Source: The author, based on CDB 2016 Annual Reports

Export-Import Bank (Eximbank)

Nature and Purpose

  • China’s Export-Import Bank (Eximbank), created in 1994, acts under the direct supervision of the State Council.
  • Its operations aim at the facilitation of the export and import of Chinese mechanic and electronic goods, equipment and new/high technologies.
  • It is headquartered in Beijing, with 29 domestic branches, one branch in Hong Kong and four representation offices abroad (Southern and Eastern Africa, North and Western Africa, Paris and St. Petersburg)

 

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Source: The author, based on The Export-Import Bank of China Annual Report For 2016

 

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Source: The author, based on The Export-Import Bank of China Annual Report For 201

Agricultural Development Bank of China (ADBC)

Nature and Purpose

  • The Agriculture Development Bank of China (ADBC) is a state-owned agricultural policy bank under the direct administration of the State Council, established by Memo No. 25, 1994, of the State Council. The Bank’s operations are regulated by China Banking Regulatory Commission.
  • The objective of ADBC is to promote the development of agriculture and rural zones, through the following activities: raising funds for agricultural policy companies; fomenting agricultural policy credit companies specified by the central government; and support Commercial establishments related to agriculture.
  • Headquartered in Beijing, ADBC has branches and sub-branches distributed throughout the Chinese territory.

 

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Source: ADBC Annual Report, 2013 and 2015

 

Chart by Visualizer

Source: The author’s based on DBSA Annual Report (2016)