Recently, the current finance industry is countering“cruel” competition. Lots of new but similar products issued by differentfinance institutions. In order to occupy the market, these companies try to attract investors by means of reducing price. It exactly reflects the current situation of the vicious competition in China’sfinancial sector. We need to understand the structural problems and institutional deficiencies in this competitive state, and find the corresponding treatment methods. If this problem is not solved, it is bound to affect the healthy development of China’s economy.
In fact, reasons for this vicious competition in the Chinese financial sector are very simple. Firstly, Chinesefinance is not only affected by the bad habits of the internationalfinancial community, but also due to a structural imbalance, Chinese financial products lack a more effective and safe product innovation. Secondly, the system performance incentive mechanism is unique, single and irreplaceable.
Institutions are used to robbing other agencies of clients on account of directivity and effectiveness. The “index economy” with Chinese characteristics is also an important reason for China’s GDP index to go up in last 30 years. To better protect the rights of the financial consumers, actions must be taken by the financial authorities.
First of all, if we can solve the“xenophile”habit of thinking, we can reduce the pressure of foreign banks. Many domestic banks have one or two foreign banks as their strategic partners. In fact, the contribution of these foreign banks to China is very limited, but foreign banks make the use of China banks to improve its fame and market share in china. In view of this, the China banks can learn more technical
skills and management methods from foreign banks and benefit from each other.
Instead of focusing attention on domestic market and competition, China bank is supposed to put more emphasis on international market.
Next, instead of chasing high income by means of selling product at lower price, finance institutions are suggested emphasizing on risk management due to common sense that high profit is always accompanied by high risks. Based on systematic risk management, it would be obvious to discover the fact that risk management could improve the quality of asset and correspondingly enhance competitive power. In view of long term, giving up purely chasing turnover, more or less, is a more rational transformation for most offinance institutions in China.
Finally, plagiarism is well-known over China market. Therefore, it is effective if government could stipulate specific laws with regards to plagiarizing. For example, launching more regulations on new thriving products.
References
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Xian Xuis the Director of China Insurance and Social Security Research Center, Fudan University and the Managing Associate Director of Fudan-UC Center on Contemporary China, based on University of California San Diego. He serves also as executive council member of the Insurance Society of China and senior member of Accounting Society of China. He is also a research associate at Centre for European Economic Research in Germany. He obtained his Ph.D. in economics from Karlsruhe Institute of Technology. His research focuses on insurance, disaster economics, and risk management.
French Financial Market
and the French Financial Consumer
Jean-Paul A. Louisot
French citizens tend to have relatively high levels of savings; however this does not contribute to strong individuals’ support to the financial market. Traditionally in developed market, the financial assets of most citizens are constituted by their pension funds managed on the basis of the constitution of an individual account, process known as capitalisation whereby each individual owns a set offinancial assets, generally through a fund management company. On the contrary, in France, the pensions, for the most part, are based on repartition whereby the workers pay on an ongoing basis the pensions of those retired. The system will be explained further later in this chapter. The result is thatfinancial assets are owned by a limited fringe of the population.
The other channel for individual to participate in the financial markets is the purchase of life insurance and the country lags the other developed country in this matter in spite of tax incentives as there linger in the collective memory what happened to those who subscribed life insurance in Gold-Franc on the eve of World War I and where paid back in Franc totally devalued on the Eve of World War II.
Since then, insurance companies have worked hard to restore the citizens’trust and confidence in the product offered.
The French Government is currently considering a serious overhaul of the French retirement systems that may modify the life insurance market and might take place as early as 2020 but there is no way at this early stage to project the size or side of the impact.
J.-P. A. Louisot (&)
Institut Catholique de Lille, Lille, France e-mail: jplouisot@aol.com
©Springer Nature Singapore Pte Ltd. 2018
T.-J. Chen (ed.),An International Comparison of Financial Consumer Protection, https://doi.org/10.1007/978-981-10-8441-6_6
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