In 1979, China began breaking the single-bank model dominated by the People’s Bank of China (PBC). Several state-owned specialized banks were (re)established to support different parts of the economy, setting the stage for later “Big Four” commercialization and reform.
Industrial and Commercial Bank of China (ICBC) was established on January 1, 1984. It took over many commercial banking activities from the PBC, supporting China’s shift toward a two-tier system with a central bank and separate commercial banks.
In 1993, the State Council issued a major decision on reforming the financial system. It called for separating policy lending (government-directed loans) from commercial banking so that the big state banks could move toward commercial operations and clearer balance sheets.
In 1994, China established three policy banks—China Development Bank, Export–Import Bank of China, and Agricultural Development Bank of China. This moved policy-based lending out of the Big Four banks, helping them transition toward commercial banking and modern risk management.
In 1995, China adopted the Commercial Banks Law, which took effect in 1995. The law strengthened the idea that commercial banks should operate under clearer legal rules, supporting the broader shift from administrative credit plans toward more market-based banking practices.
In 1998, China issued special government bonds totaling RMB 270 billion to recapitalize the four large state-owned commercial banks. This step aimed to strengthen bank balance sheets and prepare the sector for deeper restructuring and tighter oversight.
In 1999, China created four state asset management companies (AMCs) to take over large volumes of non-performing loans (loans not being repaid) from major state banks. This “bad bank” approach helped isolate problem assets so the Big Four could move toward cleaner, more commercial balance sheets.
By the early 2000s, the four AMCs had bought roughly RMB 1.4 trillion of non-performing assets from major banks. This scale matters because it shows how central the AMC program was to stabilizing and restructuring the state banking system.
In 2003, the PBC established Central Huijin Investment as a state vehicle to recapitalize banks and act as a shareholder on behalf of the state. This supported governance reforms by separating “owner” functions (shareholding oversight) from day-to-day bank management.
In April 2003, China set up the China Banking Regulatory Commission (CBRC) to regulate and supervise banks and certain non-bank financial institutions. Creating a dedicated banking regulator was part of strengthening oversight after years of rapid credit expansion and rising bad debts.
In 2004, Bank of China was restructured into a joint-stock commercial bank controlled by the state and renamed Bank of China Limited. This corporate change was designed to support modern governance (boards, supervision, internal controls) and to prepare for introducing outside investors and future listing.
In September 2004, China Construction Bank Corporation was formed as a joint-stock commercial bank under China’s Company Law. This restructuring was part of the broader program to modernize the Big Four’s governance and make them more transparent to investors and regulators.
On April 4, 2005, the State Council approved ICBC’s reform plan, moving it further into the pilot restructuring of wholly state-owned commercial banks. The approval marked a transition from earlier cleanup steps (capital injections and bad-loan transfers) toward corporate restructuring for market listing.
On October 27, 2005, China Construction Bank began trading in Hong Kong after a large IPO, widely treated as a major milestone in China’s Big Four reform. The listing helped test market discipline—investor scrutiny, disclosure expectations, and capital market pricing—on a flagship state bank.
China: State Banking Reforms and the Rise of the Big Four Banks (1979–2005)