Yes, there was somewhat bad news. China uncovered RMB860 billion ($118.6 billion) in financial irregularities last year. This was reported on the China Banking Regulatory Commission Website. 117 bank managers had been removed from office.
Now for the good news:

Profits for Chinese banks grew to RMB298.7 billion at the end of 2007, up from RMB36.4 billion 2002, when the CBRC started operating.
Irregularities were down 58.4% from a year ago.
The average bad loan ratio for major Chinese banks dropped to 6.7% at the end of 2007 compared with 23.6% five years ago.
The total assets of Chinese banks’ topped RMB52.6 trillion at the end of 2007, from 2002’s RMB23.7 trillion and up on the previous year’s RMB43.95 trillion.
At the end of 2007, five Chinese banks have control or hold stakes in overseas financial players.
Seven Chinese banks have 60 overseas outlets with overseas assets topping $167.4 billion.

The regulator said it will draw lessons from the U.S. subprime crisis to improve its overseeing of new, innovative finance products.
Source: China View

China’s banking regulator has announced a timetable for the country’s financial institutions to implement new accounting rules designed to step up internal controls.

The China Banking Regulatory Commission (CBRC) said on its website that listed financial institutions, a majority of them being banks, should have implemented the new rules by now. Our illustration shows Liu Mingkang, chair of the commission.

The rules, drawn up by the Ministry of Finance last year, target listed companies and came into effect from the start of 2007.

Policy banks, the Agricultural Bank of China, unlisted joint stock banks, China Postal Savings Bank, city commercial banks, foreign banks, trust companies and financial leasing and currency dealing companies should implement the rules from the beginning of 2008. Which is about two months away.

And rural financial institutions should start complying from 2009 at the latest.

China’s four state-owned asset management companies, set up in 1999 to take on bad loans from the major four state-owned commercial banks, should also switch to the new standards in the year after they complete reforms.

The CBRC said the new accounting rules will enable both investors and regulators to have better access to the accounting information of financial institutions.
Source: Forbes

Global accounting firm Ernst & Young plans a nearly four-fold jump in its China staff in the next decade, to about 30,000 from 8,000,

The firm, one of the world’s ‘Big Four’ auditing firms — in some countries only members of that Big Four can actually carry out audits so complex has auditing become — also plans to open two to three new branches annually over the next few years.

James Turley its chief executive, seen in our illustration, said in Shanghai that the expansion will be in western China to support Beijing’s ‘Go West’ economic policy.

He said when in Shanghai at Reuters China Century Summit, ‘This is all people business and the biggest risk for us is if we don’t get the right kind of people for our company.

‘We need to have a firm in China in the next foreseeable future, you know, 10-plus years, and we are not talking about 8,000 or 9,000, we are talking about 25,000, 28,000 or even 30,000 staff in China.’

He said the firm wants to hire people from universities and industry, adding that many Ernst & Young staff around the world are very interested in learning Chinese and want to work in China.

He made the point that for its rate of expansion China lacks enough professional accountants. The situation is made worse by Beijing encouraging Chinese companies to go public and improve their corporate governance.

As a result, competition for accounting talent in China has becomes very fierce and many CEOs of foreign companies have complained it is difficult to find enough qualified financial experts when they expand their business in China.

Ernst & Young, which operates ten offices across China, took over a local accounting firm in 2001, making it the first foreign player in the industry to make such an acquisition in China.
Source: Reuters