Leading U.S. financial services executives urged China's premier at a luncheon Tuesday to clarify policies on foreign lending and investments. Zhu Rongji was peppered with questions about the Chinese government's stance on loan guarantees during the closed-door meeting in New York. The event, hosted by the American Bankers Association, drew 21 senior U.S. banking, securities, and insurance industry executives.
Several Chinese private investment corporations have gone bankrupt in recent months amid confusion over whether the government had guaranteed tens of billions of dollars in loans.
"A number of U.S. representatives expressed the desire to have clear road signals or signs with regard to (Chinese) government policy," Donald Ogilvie, executive vice president of the ABA, said at a press briefing after the luncheon.
In response, Mr. Zhu assured U.S. executives that China will work to avoid allowing similar situations to happen again, Mr. Ogilvie said. But the Chinese premier also advised U.S. lenders and investors to adopt tighter practices in the future.
"His response was that foreign businesses should also do a clear commercial analysis when lending to such institutions," Mr. Ogilvie said. Mr. Zhu has been in the United States for several days as part of a broader effort to improve the two countries' relations.
Among the executives at the luncheon and a 40-minute discussion with Mr. Zhu in the Waldorf-Astoria Hotel were Henrique de Campos Meirelles, president of BankBoston Corp.; George J. Vojta, vice chairman of Bankers Trust Corp.; Walter V. Shipley, chairman of Chase Manhattan Corp.; William R. Rhodes, vice chairman of Citigroup Inc.; and Michael E. Patterson, vice chairman of J.P. Morgan & Co.
Other companies represented included Aetna Inc., American International Group Inc., Bear Stearns Cos., Credit Suisse First Boston, Lehman Brothers Holding Inc., Merrill Lynch & Co., and Morgan Stanley Dean Witter & Co.
In his remarks, Mr. Zhu presented a brief update of economic reform in China, efforts to strengthen China's banking system, and the country's privatization efforts.
He also expressed optimism that China will reach an agreement to enter the World Trade Organization this year. Doing so would require China to allow foreign banks and financial institutions far greater access to its markets.
Mr. Ogilvie said U.S. financial executives were hopeful that an agreement would be reached this year and expressed support for China's efforts to join the trade group. He declined to comment on reports that U.S. financial institutions have been cutting back credits to China in the wake of the investment corporation bankruptcies.
"My sense is that he is anxious to move forward on WTO negotiations," Mr. Ogilvie said, referring to Mr. Zhu, "and phase in financial services in China."