On the first glance, there couldn’t be a larger difference between China and Germany, but on closer consideration, both countries do have things in common. This also holds true for the banking sector, in particular when speaking of the City Commercial Banks (CCBs) in China and the German Sparkassen (savings banks). On 8 March, Georg Fahrenschon, President of the Deutscher Sparkassen- und Giroverband (German Savings Banks Association – DSGV) and Yuannian Chen, General Secretary of the China Banking Association (CBA) signed a cooperation agreement to strengthen contacts and an exchange of experience as well as the organisation of training measures and conferences on a regular basis. Besides the leaders of the China Banking Association, chairpersons and other executive staff of large Chinese Commercial Banks (CCBs) were among the delegation members.
Differences and similarities: Many parallels in the business structures of a German Sparkasse and a Chinese Commercial Bank
Like the German Sparkassen (savings banks) the 140 Chinese CCBs are regionally operating institutions with a strong market share. Although striving for sustainable profits, they always have an eye on social responsibility. Both institutional groups support the development of their regional economy. Both put emphasis on a stable business model, ensuring a good market position and cooperating well with regional policy-makers and the respective banking supervision. They cultivate the set-up and expansion of international relations via suitable networks. Some 20 years ago, the CCBs developed out of the merger of local cooperative banks. The municipalities are large direct or indirect shareholders of their local CCBs. The signatories of the agreement underlined the value of the cooperation: “In our view, the City Commercial Banks form the fundaments of a pillar stabilising the Chinese banking market for small and medium-sized enterprises and thus come very close to the model of a German savings bank”, explained DSGV President Georg Fahrenschon. Yuannian Chen, CBA’s General Secretary emphasised that they wanted to benefit from the vast and long-term experience of German Sparkassen with their regional structures.
Sparkassen as successful export model to optimise SME financing
After proving possible development options for local banks worldwide, the CBA is particularly convinced of the German savings banks model to serve as idea generator for the Chinese CCBs. The Chinese side is particularly interested in providing financial services across the board as a possible tool to encounter the drift to the cities. The management of savings bank, the handling of crises like the financial crisis, and the dealing with regulatory issues imposed by Basel and Brussels have impressed the Chinese counterparts. From the first day on, Dr. Karl-Peter Schackmann-Fallis, DSGV’s Executive Member of the Board, personally led the negotiations with the CBA, which now culminated in signing the cooperation agreement.
The cooperation aims to strengthen the communication between both institutional groups. CBA and DSGV serve as intermediaries for their member institutions. In addition to the exchange of expertise in training issues and other specialist fields between single institutions, joint events will be organised. Here, the focus will be on financial services for SME, risk management, governance, sustainable development, IT infrastructure as well as training and further education. Being specialised in the imparting and implementation of know-how and expertise worldwide, the Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation) will closely accompany these measures. The Sparkassenstiftung started its project activities in China some 12 years ago and since then has successfully executed cooperation projects focusing on enhancing financial services for small and micro enterprises with five CCBs in three Chinese provinces.
An article about the German-Chinese cooperation can be accessed <link fileadmin user_upload pdf artikel dsz_11-3-2016_dsgv_cba_berlin.pdf>here (german language only)
Contact partners:
Nicole Brand / Carina Lau
Sparkassenstiftung für internationale Kooperation
Simrockstraße 4
53113 Bonn
Phone: +49 228 9703 -6634 / -6608
Fax: +49 228 9703 -6613