China has four asset management companies, and all established in 1999, soon after the Asian Financial Crisis. They've since played a crucial role in eradicating bad bank assets, and reducing debt for state owned enterprises. Now the four asset management companies are stepping into a new phase in the financial sector.
In 1999, when the Asian Financial Crisis was beginning to fade, state owned banks had a huge amount of bad assets. So the Chinese government established four asset management companies to dispose bad assets and maintain the stability of the country's financial system.
China Cinda Asset Management Corporation was set up in April 1999, and was assigned to clear bad assets tied to China Construction Bank. Later in October, China Orient, China Huarong and China Great Wall asset management corporation were set up to help out BOC, ICBC and AgBank.
Cai Esheng, Deputy Director of China Securities Regulatory Commission said "Asset management companies are the outcome of responding to the Asian Financial Crisis in the last century."
Tian Guoli, Chairman of China Cinda Asset Management Corp. said "Cinda was set up after the Asian Financial crisis, and in the past ten years, we've play an important role in disposing banks' bad assets, helping them list on the market, and reducing the debt rates of state owned enterprises."
Ten years later, the four asset management companies are stepping into a broader financial market. Now the corporations have more financial licenses like securities, insurance, trustee, and financial leasehold.
To the end of last year, the four companies had purchased or been entrusted to manage 3.5 trillion yuan in bad assets, and have reclaimed more than 500 billion yuan in all.
- CSRC approves Cinda's reform 2010-07-19