Passage 105
Allow me first of all to presents a summary of some of the characteristics that separate the practice of the Chinese exchange market from the international practice.// The Chinese exchange market is dominated by one band, which could create distortions in the exchange market and exchange rates.// Chinese bands continue to conduct foreign exchange operations under legal provisions that makes it difficult to integrate foreign exchange operations into the overall risk management of a bank.// Branches of Chinese banks have at time appeared to behave more like subsidiaries than branches, as if they had their own capital and balance sheet.//
Passage 106
Now I’d like to mention three major tasks facing Chinese banks and the authorities.// First, parallel procedures must be established to monitor and measure true currency risks.// Second, all market participants must be subject to the same regulations or constraints, including both domestic and foreign banks.// Direct dealing between banks requires a code of conduct, which promotes healthy competition.//
Passage 107
As China’s automobile market matures, prominent figures of the world’s leading automobile manufactures have come to China on investigation tours in recent years.// Auto industry’s most fierce competition has been staged in China, the biggest virgin auto market in the world.// One auto exhibition after another has been sponsored in China’s big cities.// Almost all the world’s leading auto manufactures are aware of China’s potential auto market and have started to produce new models specially designed for the Chinese market.//
Passage 108
In the early 1980s, Volkswagen took a courageous step and co-invested with Shanghai to set up a join venture.// Mercedes has also cooperated in form of technology transfer and joint investment with Chinese companies.// In 1994, the Chinese government staged a new policy on auto industry, encouraging foreign investment in vehicle spare parts.// Earlier China had implemented a license system and high-tariff policies on motor vehicle import in order to support its domestic auto industry.//
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