Abstract: China Postal Savings has become the sixth largest financial institution at present, but it has been widely criticized by financial circles. These criticisms are rooted in the unique institutional arrangement of postal savings, so the trend of this institutional arrangement has become the focus of attention. Based on the principle of institutional economics, this paper reveals the internal logic of postal savings institutional arrangement, partly answers the reasons for this widely criticized institutional arrangement, points out the instability of this system, and discusses its evolution direction. The conclusion of this paper is that the current postal savings system is a link between the past and the future and has its inherent inevitability. Only by considering the interests of postal savings system suppliers, the Pareto improvement of postal savings system in the future can be realized.

Keywords: China Postal Savings; Institutional change; Path dependence

I. Introduction

China Postal Savings has developed rapidly since the opening of 1986. ..... How did such a complicated institutional arrangement form, change and develop?

Second, the institutional analysis framework of postal savings

……

Three. Changes of Postal Savings System in China

(A) the path of China postal savings system changes

The change of postal savings system in China has gone through three stages. (1)1986 ——1989 deposit system. The institutional arrangements in this period are as follows: ① Postal savings business is managed by the Ministry of Posts and Telecommunications. Savings deposits absorbed by postal institutions are the source of credit funds of the People's Bank of China, and all of them are deposited in the People's Bank for unified use. (3) The interest paid by postal institutions to depositors shall be regularly allocated by the People's Bank of China according to the actual payment; Postal savings deposits deposited in the People's Bank of China do not calculate interest. The reserve fund required for postal savings business shall be pre-allocated to postal institutions after annual approval by the local people's bank according to actual needs, without interest. The People's Bank of China pays a handling fee of 2.2‰ according to the monthly average balance of savings deposits in the post office, which is settled by the opening bank on a monthly basis and paid quarterly. The handling fee rate is tentatively fixed for three years. Postal savings must implement national financial policies and relevant laws and regulations.

(2) 1989-2003 deposit transfer system. In order to facilitate the long-term and stable development of postal savings and strengthen the internal accounting and management of the People's Bank of China and the post and telecommunications departments, the business relationship of postal savings deposited in the People's Bank of China is changed to transfer relationship, that is, postal savings are handled by the post and telecommunications departments themselves, and the post and telecommunications departments open current deposit accounts and long-term deposit accounts in the People's Bank of China, and the absorbed savings deposits are transferred to the People's Bank of China. The People's Bank of China shall, according to the accumulated balance of the postal and telecommunications departments in the deposit accounts of the People's Bank of China, pay the interest on the transferred deposits and the discount on savings appreciation to the postal and telecommunications departments. The deposit in the long-term deposit account bears interest at the annual rate of 13.5% and is paid once at the end of each quarter. In case of national unified adjustment of interest rates, the interest rate of postal savings on deposits will also be adjusted accordingly. Interest on value-added savings is still paid by the People's Bank of China. Stop paying postal savings fees and provide reserve funds; The depositor's deposit interest is paid by the post and telecommunications department; The spread obtained by the post and telecommunications departments is the operating income. 1997 65438+February 2 1, the long-term and current accounts are merged, and the unified account system for fund transfer is implemented, and interest is calculated quarterly.

(3) Since August 2003, the deposit system has been in use. In September, 2003, the People's Bank of China initiated the preliminary plan of postal savings system reform. The scheme adopts the way of separating the old and new funds, with August 2003 1 as the boundary. After that, the newly-increased postal savings were transferred to the People's Bank of China, and the interest rate of reserve deposits of financial institutions in the People's Bank of China was implemented. This part of the deposit can also be used by the postal savings and exchange bureau independently, and the interest rate is determined by the market. The application methods include: entering the inter-bank bond market to participate in bond trading, applying to become a member of the underwriting syndicate of government bonds and policy financial bonds according to procedures, handling large-sum agreed deposits in Chinese-funded commercial banks and rural credit cooperatives, and cooperating with policy banks to carry out some intermediary business. For the old transfer before 1, the People's Bank of China will temporarily interest at the current transfer rate of 4. 13 1.

(B) the inherent logic of the changes in the postal savings system

At the end of 1970s, China's economic system has deviated from the system equilibrium point, and its financial system, as an important part, is also facing the pressure of institutional change. To take a step back, assuming that the financial system was balanced at that time, when the external institutional environment of the financial system changed, the financial system balance could not be maintained. Because one institutional change will require another institutional change, eventually the whole institutional system will change. Since 1978, China's economic environment has also changed due to the well-known political and ideological changes. From 1986 to 1989, the factors that have a significant impact on the postal savings system are as follows: First, the income of residents is increasing, the national income distribution is inclined to individuals, and the idle funds in society are increasing day by day, so more financial intermediaries are needed to accumulate funds to support production development, as shown in table 1. In the planned economy period before 1978, the investment and financing system was dominated by finance, supplemented by banks, and one bank monopolized the world, allocating funds vertically rather than horizontally. Economic resources are concentrated in the hands of the state, which is both a saver and an investor. Residents save very little and are pure consumers. In this environment, banks became financial cashiers and the financial system adapted to the economic environment at that time. After 1978, the economic resources in the hands of the state are relatively reduced, the number of residents is relatively increased, savers and investors are separated, and the original unified financial system is no longer suitable for the needs, and more financial intermediaries are needed to link savings and investment.

Table11978 ——1989 Proportion of fiscal revenue to GDP (%)

Year1978197919801983198419851986.

The ratio of fiscal revenue to GDP (%) is 31.2 28.4 25.7 24.2 22.9 23.0 22.9 20.818.415.8.

Source: Statistical Yearbook of China 200 1.

(2) The People's Bank of China has restored and added some financial intermediaries, but it still cannot meet the demand of the real economy for financial intermediaries. From the expansion of national banking institutions and personnel since the 1960s, we can see that the real economy needs financial intermediaries. 198 1 At the end of the year, there were 4,725 national banks1family, with 685,483 employees, and there were 67,626 employees in national banks 1986 family, an increase of 1006808 in five years.

Table 21981-Total number of banking institutions and employees in China at the end of 2000

Year198119821984198519861987/kloc-0.

The total number of institutions at the end of the year is 4725148925 49687 53898 58364 67626 79619 98076 945631165438.

Number of employees at the end of the year (person) 685483 704077 732499 847000 92482810068081224041204009134333106544.

Year199119921994199519961997/kloc-0.

The total number of institutions at the end of the year is12335612062213886219851601421573651.

Number of employees at the end of the year (person)149982317430191876285192298419/kloc.

Source: China Financial Yearbook.

(3) Financing is difficult and funds are tight. 1978 deposits and loans were-7155 million yuan and 1986 deposits and loans were -223 1 100 million yuan, an increase of 3. 12 times. As shown in Table 3.

Table 3 1978—— 1989 Sources and Utilization of Credit Funds of National Banks (100 million yuan)

Year19781979198019819821983.

Various deposits1134.51339.1661.2 2035.6 2369.9 2788.6.

Various loans1850 2039.62414.3 2764.63180.63589.9

All deposits-all loans-715.5-700.5-753.1-729-810.7-801.3

Year198419851986198719881989.

Various deposits 3583.9 4264.9 5354.7 6517 7425.8 9013.9

Various loans: 4766.15905.6 7590.8 9032.510551.312409.3.

All deposits-all loans-1182.2-1640.7-2236.1-2515.5-3125.5-3395.4.

Source: China Financial Yearbook.

(4) The huge demand for financial intermediaries has caused the supply of financial intermediaries in all walks of life. Different initial conditions and resource endowments in all walks of life lead to different financial intermediaries. Such as the central government, local governments, relevant government departments, private individuals or organizations. There are legal and illegal, direct financial intermediaries and indirect financial intermediaries. Posts and telecommunications institutions also have the resource advantage of handling finance: by 1986, there were 53,000 post offices and offices in China, with more than 654.38+million delivery personnel covering 4 million kilometers of delivery routes in urban and rural areas, and a telecommunications network extending in all directions. Postal savings can be developed by using other postal services, and it has a history of handling financial services. However, in the financial intermediary supply market, the People's Bank of China is the monopolist, and holds the power to examine and approve the financial intermediary supply. All financial intermediaries that have not been approved by the People's Bank of China are illegal financial institutions, and post and telecommunications institutions must cooperate with the People's Bank of China in financial business. On the other hand, the cost of China People's Bank's financial business by using the network of post and telecommunications institutions is far less than that of setting up a separate financial institution, and the cooperation between the two parties will bring a win-win situation. Encouraged by the potential profits, the People's Bank of China and the Ministry of Posts and Telecommunications formed the first action group. Because both of them belong to the government agencies under the State Council, the State Council is the final arbiter of major decisions, and the State Council, as the second action group, helps the first action group to gain potential profits. The next question is how to distribute the potential profits among them. Because the People's Bank of China is in a strong position in the financial intermediary supply market, the profit distribution is inclined to the People's Bank of China. First, post and telecommunications institutions only have the right to absorb deposits, but not the right to use funds. 1978—— 1989 the loans of the national bank credit funds have always been greater than the deposits. As shown in Table 3, the right to use funds is a scarce resource, and the People's Bank of China holds the right to use funds. Secondly, following the practice of 65438+early 1950s, the postal service is positioned as an agency of the People's Bank of China, and the People's Bank of China can decide whether to stay or not according to the performance of the postal service. As compensation, postal savings are managed by the Ministry of Posts and Telecommunications, and the People's Bank of China pays a certain handling fee to postal institutions. For the Ministry of Posts and Telecommunications, this institutional arrangement is cost-effective, because the handling fee paid by the People's Bank of China is far greater than the actual cost of postal savings, and the development of postal savings shares the fixed cost of postal institutions and exerts the scale effect of postal institutions.

The institutional arrangement reached between the People's Bank of China and the Ministry of Posts and Telecommunications from 65438 to 0986 laid a basic framework for the future development of postal savings. This arrangement has achieved a win-win result. 1989 Postal Savings has 15609 outlets, 745 100 households, 37970 employees, and the deposit balance is 1008 billion yuan, increasing by 5.58, 33.4 and 3.5 respectively compared with 1986. However, this arrangement has a short term, which is manifested in the fact that the handling fee rate paid by the People's Bank of China to post and telecommunications institutions is tentatively set at three years. This institutional arrangement means that the two sides will renegotiate after three years. Because financial intermediaries still can't meet the demand of the real economy for financial intermediaries, as shown in Table 2, funds are still tight, as shown in Table 3, and inflation pressure is shown in Table 4, and the demand pressure of China People's Bank for funds has not been alleviated. This pressure is reflected in the balance sheet of the People's Bank of China, which is characterized by high financial loans, bank credit and cash issuance. During the period of 1987- 1989, the budgeted loans/assets of China People's Bank were 13%, 12%, 12%, and the total bank loans/assets were 72%, 73% and 73% respectively. The People's Bank of China can still make potential profits from postal savings. On the other hand, the deposit system is not conducive to the long-term development of postal savings, with 65,438+065,438+0702,000,000 and 74,565,438+0989 reduced by 425,654,380,000. Postal savings shall be handled by the post and telecommunications departments themselves, and the postal savings business relationship deposited by the post and telecommunications departments in the People's Bank of China shall be changed to deposit-transfer relationship, and the People's Bank shall pay deposit-transfer interest to the post and telecommunications departments according to the accumulated balance of the post and telecommunications departments in the deposit account of the People's Bank of China.

Table 41978 —— Retail Price Index of Commodities in 2003 (%)

Year1978197919801983198419851986.

The retail price index of commodities is100.7102102.410/0/0/0/0/0/0.5102.8/.

Year199119921994199519961997/kloc-0.

Retail price index of commodities102.9105.413.2121.714.8106./kloc

Source: China Statistical Yearbook 200 1, 2004.

1986 and 1989 have opened up a broad space for the development of postal savings. This is fully manifested in the outlets of postal savings, the total number of depositors, the scale of deposits, the circulation of bank cards and the market share of savings. Postal savings income shows the trend of increasing scale. However, after the mid-1990s, the income cost of China People's Bank reversed. First, the size of financial intermediaries is shrinking. At the end of 1996, the total number of banking institutions in China reached 160 142, and in 2000 it dropped to 125449, a decrease of 3 19 16, as shown in Table 2. Financial intermediaries show that the overall supply exceeds demand, and the motivation of the People's Bank of China to use postal institutions to absorb and store is weakened. Second, the deposit balance of financial intermediaries is greater than the loan balance, and some funds are idle. 195, the deposit balance exceeded the loan balance by 332.42 billion yuan for the first time, and in 2003, the deposit balance exceeded the loan balance by 4,905.936 billion yuan, as shown in Table 5.

Table 51990 —— Deposits and loans of financial institutions in 2003 (100 million yuan)

Year199019919921993199419951996.

Deposit:14012.618079 23468 29627 4072.2 40438+0.2. 53647

Deposit-loan-3668.1-3258.8-2854.9-3316.1-337.6+08.4.10889.0000000000606

Year199719981999 2000 2006 5438+0 2002 2003

Various deposits 82390.3 95697.9108778.9123804.4143617.2170917.4 208055.6.

Deposits-loans 7476.29173.815044.63538.03005656566

Source: China Financial Yearbook.

Third, deflation. 1997 The retail price index was 100.8%, and in 2003 it was 99.9%, as shown in Table 4. Fourthly, the postal savings system conflicts with the monetary policy of the People's Bank of China, which greatly reduces the effect of monetary policy. The People's Bank of China used various policy tools to increase currency issuance, but the postal savings sent the increased base currency back to the People's Bank of China. The People's Bank of China is fully aware of this, and pointed out in the report 200 1 Analysis of Monetary Policy in the First Half of the Year that "since 1998, postal savings have maintained a rapid growth momentum of about 20% annually. As the postal savings are fully transferred to the central bank, the more postal savings increase, the more sources of base money will be. However, when the central bank's base money delivery channel is narrow and cannot be used in time, the more postal savings increase, the stronger the policy effect of the central bank's passive tightening. " Fifth, with the expansion of postal savings, its influence on the operation of financial markets is also increasing, which requires the People's Bank of China to strengthen supervision. However, according to the system arrangement of 1989, postal savings are handled by post and telecommunications departments, and postal savings and postal business accounting are not separated, so it is difficult for the People's Bank of China to effectively supervise postal savings. The People's Bank of China realized that if it can change the institutional arrangement of 1989, it can at least reduce its own losses. However, the system adjustment after 1997 is not conducive to the People's Bank of China. First, from 65438 to 0997, the People's Bank of China, after consulting with the Ministry of Posts and Telecommunications and relevant departments in the State Council, put forward the general idea of reforming the postal financial management system, that is, reorganizing the postal financial department into a financial legal person with independent operation, independent accounting, self-financing and self-restraint. From 65438 to 0999, the State Council agreed in principle with the opinions of the People's Bank of China on the reform of postal savings and exchange management system, but it was later dropped. Second, the nominal interest rate of postal savings on deposits is "rigid" and remains high when the reserve interest rate of commercial banks is greatly lowered. The annual interest rate of China People's Bank's refinancing and postal savings are upside down to the real interest rate of deposits. The more postal savings are transferred to China People's Bank, the greater the losses of China People's Bank, as shown in Table 6. We speculate that the reason may be that the Ministry of Posts and Telecommunications lobbied the State Council.

Table 6 Postal Savings-to-deposit Interest Rate (%)

Resident time

Annual deposit

Postal savings deposit interest rate

Nominal interest rate Postal savings to deposits Real interest rate Postal savings to deposits Nominal interest rate Postal savings to deposits Real interest rate Commercial bank reserve annual interest rate Central bank refinancing annual interest rate Central bank refinancing annual interest rate-Postal savings to deposits annual interest rate Real interest rate

1997. 12.2 1 5.67 7.452 7.6628 1.782 1.9928 7.56 9.36 1.6972

1998.03.25 5.22 7.2 18 7.4 157 1.998 2. 1957 5.22 7.92 0.5043

1998.07.0 1 4.77 6.6429 6.8 102 1.8729 2.0402 3.6 1 5.67 - 1. 1402

1998. 12.07 3.33 5.922 6.0548 2.592 2.7248 3.24 5. 13 -0.9248

1999. 12.2 1 2.25 4.6008 4.6808 2.3508 2.4308 2.07 3.78 -0.9008

2002.02.2 1 1.98 4.347 4.4 184 2.367 2.4384 1.89 3.24 - 1. 1784

2003.0 1.0 1 1.98 3.847 3.9029 1.867 1.9229 1.89 3.24 -0.6629

2003.08.0 1 1.98 1.89 1.9034 -0.09 -0.0766 1.89 3.24 1.3366

Note: The nominal interest rate of postal savings on deposits is calculated quarterly, while the real interest rate of postal savings on deposits can be calculated by compound interest. Source: China Financial Yearbook over the years.

Fruit. Since the establishment of Postal Savings, postal agencies have become vested interests in the 1986 and 1989 silver-mail agreements. Because the supply market of postal savings system is not completely competitive, postal institutions try to maintain the existing institutional arrangements, so they need to seek political support from higher government departments. 199, the separation of postal services and telecommunications caused a loss of 179 billion yuan, a debt of 9.5 billion yuan, and a funding gap of 2 10 billion yuan for projects under construction. The state launched the "853 1" plan, and since 1999, the postal service has been subsidized by 8 billion yuan, 5 billion yuan, 3 billion yuan and 1 billion yuan respectively. The Ministry of Posts and Telecommunications put forward the plan of "turning losses into profits in three years and stepping into a benign development track in five years" (Cai Youcai, 2003). In fact, the People's Bank of China bears the subsidies that should be borne by the finance. However, there is a time limit to bear this loss. More importantly, in the 1989 agreement on banking and postal services, the People's Bank of China laid down an institutional device, that is, "If the state uniformly adjusts the interest rate, the postal savings will adjust the deposit interest rate accordingly." However, at that time, the two sides did not reach an agreement on how to adjust the deposit interest rate, thus withholding the life door of the Ministry of Posts and Telecommunications. Three years later, in August, 2003, the People's Bank of China opened this device, which solved the problem that the annual interest rate of the People's Bank of China's refinancing was upside down with the real interest rate of postal savings. At the same time, the channels for the use of postal savings funds were relaxed, and postal savings entered the stage of independent use of funds.

Four, China postal savings system in the future.

References (according to the requirements of Annex 2)

[1] Wei Li, 2000: Investigation and reflection on China's postal savings system, Financial Research,No. 10.

[2] Wang Yang. Postal savings, policy finance and central bank's monetary policy [J]. Contemporary Finance and Economics, 2004, (5)

[3] Du Huifen. Analysis on the Leakage Effect of Currency Multiplier under Postal Savings System [J]. Finance and Trade Economy, 2004, (4)

[4] Cai Youcai. "The fifth largest financial institution": An empirical study of China Postal Savings System [J]. Administrator, 2003, (5)

[5] Cheng Tang. Research on the Relationship between Policy Finance and Postal Savings in China [J]. Economic Research, 2002, (1 1)

Theoretical Analysis on the Changes of Postal Savings System in China

Pan Chaoshun Cheng Kun

(School of Economics and Management,

South China Agricultural University; Guangzhou, 5 10642)

Abstract: While China Postal Savings has become the sixth largest financial institution, it has also been widely criticized. These criticisms stem from the special institutional arrangement of postal savings, so they have become one of the focuses of people's attention. This paper reveals the logic of postal savings system arrangement, partly answers the reasons for this arrangement, points out its instability and studies its evolution. This paper draws the following conclusions: the current postal savings system arrangement will inevitably evolve into the past system arrangement, and only by taking care of the interests of the supplier can it be possible to improve the postal savings system arrangement in the future.

Keywords: China Postal Savings; Institutional change; Path dependence