On October 26th, the China Business Initiative at Columbia Business School marked the launch of its inaugural forum. The forum featured Ma Weihua, President and CEO of China Merchants Bank, who shared first-hand insights on the globalization of the Chinese banking sector. The China Business Initiative, organized by the Jerome A. Chazen Institute of International Business and directed by Fangruo Chen, the Ira Rennert Professor of Business, provides a platform for representatives from academia, industry and government to exchange ideas and generate research on management and economic issues facing China.
Dr. Ma attests that the type of financial crisis we face today comes once every 100 years, and the effects on the global banking industry have been far-reaching. Banks within developed countries will record a total asset write-down of USD 2.8 trillion by 2010. Global profits in 2008 alone plummeted by 15 percent year over year, while return on net assets declined by 5 percent year over year. The Chinese banking industry, however, has maintained solid performance amidst challenging market conditions. Dr. Ma attributes such performance to concerted efforts to improve banking industry fundamentals through regulatory reforms. Effectively managing innovation and growth will be crucial for the success of this industry to endure going forward.