China might implement deposit insurance this year

China might implement deposit insurance this year

A senior member of the National People's Congress hinted that China could introduce a deposit insurance scheme, which would provide a safety net for individual and institutional depositors, before the end of this year. The deposit insurance scheme is one of the central bank's key goals for 2013, although it did not provide specific details. China currently has no deposit insurance policy and Chinese banks' vulnerability to a liquidity crisis was exposed during last month's unexpected cash crunch, according to Chinese state run media.

This might seem surprising to most people, one would think that in the People’s Republic of China that the people’s money would have some security in place already. It is just one of those many assumptions that a person can make that would be wrong about China.

China, the world’s 2nd largest economy, continues to be the most important market for companies looking for growth and Chinese companies continue to globalize by investing and selling their products in new markets; what is your company’s strategy for engaging China?

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