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419 74 On the Development and Opening Up of Shanghai’s Financial Sector1 December 2, 1989 When I came to work in Shanghai on February 2 of last year, I got off the train in the morning and that afternoon I listened to a report by the city’s Bureau of Finance. Why? Because there’s no way you can be a mayor if you don’t know how to manage finances—so you must first seek a clear understanding of the fiscal situation. Now that a year has passed, I’ve come to feel that one can’t rely on fiscal work alone. I’ve become increasingly aware of the importance of finance, as I am reminded almost daily. This January, for example, Luo Shilin2 came to me because it was time to distribute fiscal allocations to the rural areas. He needed RMB 1 billion for this purpose, but he didn’t have the money, he had no cash, and couldn’t make the allocations—things were very tight. Later, Jiang Zemin and I telephoned Yao Yilin,3 and he first transferred cash from the currency-printing facility; then we sent color TVs and refrigerators down to the villages, putting out almost RMB 400 million to 500 million worth of goods in one go. That was a transfer of funds—yet no cash passed through his hands. By borrowing RMB 500 million in cash and doing a transfer of RMB 500 million, we solved the problem of the RMB 1 billion allocation for the villages. I sensed from this experience how truly important finance is. To invigorate enterprises, we must first invigorate finance; once that is done, finance can improve the operational and management capacities of enterprises and strengthen their ability to produce and survive. At the moment, enterprises come to us whenever they encounter the slightest problem—we can’t go on like this. This really impressed on me the importance of finance. 1. This is a speech Zhu Rongji delivered at a Shanghai symposium on financial work. 2. Luo Shilin was then vice president of the Shanghai branch of the People’s Bank of China. 3. See chapter 1, note 7. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 419 12/26/17 12:01 PM 420 On the Development and Opening Up of Shanghai’s Financial Sector Speaking at an international symposium on finance in Shanghai, October 14, 1990. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 420 12/26/17 12:01 PM On the Development and Opening Up of Shanghai’s Financial Sector 421 This year in particular, the money supply has been tightened and difficulties seem to be mounting, so I asked Gong Haocheng4 if we should have a symposium on finance. Shanghai used to be the finance center of pre-­ liberation China. It has many experts, and the people working in this area are very knowledgeable about finance. There’s also a lot of talent in our new generation of banks, and they’re familiar with the domestic and international situations. Let’s invite everyone to come together and discuss how to do good work in Shanghai’s finance sector. Regarding this talk of building a financial center, I want to avoid any misunderstandings and make it clear that I wasn’t the person who suggested this. It was first proposed by Mao Yuting, the general manager of Nippon Kangyo Kakumaru Securities Ltd. (Asia) in Hong Kong. He’s come to Shanghai a good number of times, and at one point I asked him how we could invigorate Shanghai . He replied that Shanghai should reclaim its former status as a financial center. He said that banks are very important and that Shanghai’s financial sector should train large numbers of talented people—that they would play a major role in Shanghai’s future development. To tell you the truth, the current standards of our banks are not very high, and compared with the commercial banks in capitalist countries, the role they play for enterprises just isn’t the same. At the very least, unlike the computerized banks in Western countries, our banks aren’t entirely familiar with the credit, debts, and operations of each enterprise—we still aren’t able to handle these matters. Maurice Greenberg, chairperson of AIG, has also raised the issue of a financial center. This company was founded in prewar Shanghai, and it published the Shanghai Evening Post and Mercury. It got its start in Shanghai and then went to New York...


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