China crdit


As china is a communist state, there is no official religion, more than half of the population identifies themselves as atheist, about a quarter of people practices Taoism, Confucianism and other traditional religions. There are also a small number of Buddhist, Muslims and Christians.


Mandarin is the main language but many dialects are there, Cantonese is also used in some part of china. There are more than 50,000 characters. They represent word or idea rather than letter that represent sounds. Reading and writing Chinese is completely different from speaking Chinese.

CuisineAmong the main styles of Chinese cooking are Cantonese, which features stir-fried dishes, and Szechuan, which relies heavily on use of peanuts, sesame paste and ginger and is known for its spiciness. Chinese do not consume a lot of meat- tofu is the source of their protein. Tea is the beverage of choice.


Chinese art is greatly influenced by the country’s rich spiritual and mystical history. Many sculptures and paintings depict spiritual figures of Buddhism. Eastern-style martial arts were also developed in China, and it is the birthplace of kung fu, which translates to human achievement.

Silk painting and calligraphy is also famous.

Celebrations and festivals

The largest festival — also called the Spring Festival — marks the beginning of the lunar new year. It falls between mid-January and mid-February and is a time to honor ancestors. During the 15-day celebration, children receive money in red envelopes for good luck and people thoroughly clean their homes to signify a fresh beginning. The holiday is marked fireworks and parades with dancers dressed as dragons. The Moon Festival is celebrated in September or October with fireworks, paper lanterns and moon gazing.

Economic inequalityChina ranked 27 th according to 2007Economic inequality is difference between individuals or population in distribution of asset, wealth, income. Here we are stressing on income gap.

According to the 2009 estimates about 480 million people live on less than 2$ per day. Income gap can be regional or rural –urban gap. The western region of china is more developed than eastern part of china. In 2009, according to the China’s National Bureau of Statistics, the urban per capita annual income at US$2525 was approximately three times that of the rural per capita annual income. This was the widest income gap recorded since 1978. There are various numerical indices for measuring economic inequality.

The prominent one used is Gini coefficient. The Gini coefficient (also known as the Gini index or Gini ratio) is a measure of statistical dispersion intended to represent the income distribution of a nation’s residents. Gini coefficient shows a scale of range of 0 to 1 , 0 being perfect equality and 1 being perfect in equality. Coefficient of more than 0.4 is not good. China’s gini coefficient is estimated to be 0.47 in 2012. This shows that china is not in a good condition.

Causes for Income Inequality

. None balanced economic developmentAfter china got their independence in 1949, they give more stress to industrialization rather than agriculture. They were not able to develop the agriculture in rural areas; they gave more stress to industrialization in urban areas.. Due to strict household registration system in china, the rural dwellers were not able to move to the urban areas. The eastern partof china was more developed than western part.

Unreasonable economic system

The government has liberalized the right to operate in many areas so as to promote competition in market. The existence of administrative monopoly resulted in serious inequality of income distribution. The employees of monopoly industry can get more income than enterprise employees. This leads to the inequality in income distribution among employees. There is a lot of corruption, and it has resulted in the formation of a large grey amount.

Imperfections of tax systemIn current tax system, personal income tax, property tax, urban land use tax, excise tax can affect the distribution of income. On the other hand gift tax, social security tax, investment tax has not been levied.

Lack of Public services.

Social security system is weakThe total lack of investment in education, the structure is irrational. 1.043754 trillion Yuan of national spending on education in 2009, the proportion of GDP was 3.06%, lower than the average level of developed countries; investment in education in the region there are also a large gap between investments in education in the western region lags far behind the eastern region

Low income transfer:Government spends large amount on infrastructure rather than on income transfer and social welfare programs.

Houkou or Chinese household system In 1958, Chinese government officially conducted the family registration system to control the movement of people from rural to urban areas. A household registration record officially identifies a person as a resident of an area and includes identifying information such as name, parents, spouse, and date of birth.. With its large rural population of poor farm workers, hukou limited mass migration from the land to the cities to ensure some structural stability.

The persons who were living outside their authorized domain would not qualify for grain rations, employer provided housing or health care. Since the 1980s, an estimated 200 million Chinese live outside their officially registered areas and under far less eligibility to education and government services, living therefore in a condition similar in many ways to that of illegal immigrants.

Measure taken by the government to reduce income inequality

Help Rural Migrants to get registered as urban Residents and benefit from all basic public services. Make Farming profitable by Industrialising agricultural production and increase minimum purchase price of major grain products. Cut tax burden for small firms.

Expand proportion of amount spend on social security and employment promotion. Foreign individuals will no longer be exempt from personal income taxes on stock dividends and bonuses they obtain from foreign-funded enterprises in China. Collect consumption taxes on more high-end entertainment activities and luxury products.

History of banking sector

The history of banking can be divided into 2 major periods

The Mao era (1949-1978)Post Mao era or Deng era( 1978 to present)


An early Chinese banking institution was called the piaohao . All piaohao were organised as single proprietaries or partnerships, where the owners carried unlimited liability. They concentrated on interprovincial remittances, and later on conducting government services. By the end of the nineteenth century, thirty-two piaohao with 475 branches were in business covering most of China .To deal with the transfer of large amounts of cash from one branch to another, the company introduced drafts, cashable in the company’s many branches around China. Entry of foreign banks

British and other European banks entered China around the middle of the nineteenth century to service the growing number of Western trade firms. The first foreign bank in China was the Bombay-based British Oriental Bank , which opened branches in Hong Kong, Guangzhou and Shanghai in the 1840s.

Other British banks followed suit and set up their branches in China one after another. The British enjoyed a virtual monopoly on modern banking for forty years. The Hong Kong and Shanghai Banking Corporation , now HSBC, established in 1865 in Hong Kong, later became the largest foreign bank in China.

The Imperial Bank of China was China’s first modern bank, opened for business in 1897. The bank was organised as a joint-stock firm. It adopted the internal regulations of HSBC, and its senior managers were foreign professionals. After the proclamation of the Republic of China, the bank changed its English name to the Commercial Bank of China in 1912

Period ofPeople bank of china was established in December 1 1948. Pboc was responsivle for both central and commercial banking. it Its objective was promoting economic growth and price stability.

Post mao

In 1995 , the Chinese Government introduced the Commercial Bank Law to commercialize the operations of the four state-owned banks,Bank of China (BOC),China Construction Bank(CCB),Agricultural Bank of China (ABC)Industrial and Commercial Bank of China (ICBC).

Bank of China (BOC),

It was founded in 1912 by the Republican government to replace the Government Bank of Imperial China. It is the oldest bank in China still in existence. From its establishment until 1942, it issued banknotes on behalf of the Government along with the “Big Four” banks of the period. As at 2009, it was the second largest lender in China overall, and the 5th largest bank in the world by market capitalization value . Bank of china specializes on foreign exchange transaction and trade finance. China construction bank

CCB was founded on 1 October 1954 under the name of “People’s Construction Bank of China” , and later changed to “China Construction Bank” on 26 March 1996. It was the second largest bank in the world by market capitalization and 13th largest company in the world. The bank has approximately 13,629 domestic branches.

Agricultural bank of china

It was founded in 1951, and has its headquarters in Beijing. ABC has 320 million retail customers, 2.7 million corporate clients, and nearly 24,000 branches. It is China’s third largest lender by assets. ABC went public in mid-2010, fetching the world’s biggest ever initial public offering (IPO).[2] As of 2011, it ranks 8th among the Top 1000 World Banks.

China Industrial and Commercial BankIt was founded as a limited company on January 1, 1984. It is the largest bank in china by total assets, employment, customer base.