Accounting Standards at Bank of China Essay Example | Topics and Well Written Essays - 2750 words

Accounting Standards at Bank of China - Essay Example The PROC (hereafter China) has been undergoing a transformation when the Communist Party decided to open up the country’s economy to the world in 1978. Since then, China has become a socio-economic miracle: a communist-socialist country of over a billion people transforming its economy into the 2nd largest in the world after that of the United States, and an economic superpower that accounts for significant economic developments in the world such as the recent increases in the price of oil, metals, and other commodities to the lowering of production costs for global products such as clothes, appliances, and machineries, amongst many other things (World Bank, 1993; Stiglitz, 2002). The Bank of China Ltd. (hereafter BOC) was founded in 1912, and until the 1949 communist takeover has performed various functions: as China’s central bank, a foreign exchange bank, and a commercial bank specializing in trade finance with branches all over China and in the major financial capitals of the world. After 1949, BOC was turned into a specialized foreign exchange bank. In 1994, it evolved into a state-owned commercial bank; in 2002, its holding company that was majority-owned by the Chinese government was listed on the Hongkong Stock Exchange; and in 2004, it was again transformed into a joint stock commercial bank in preparation for its initial public offering sometime after 2008 (BOC, 2006, p. 2-5). China has a communist form of government and a socialist market economic system with capitalist features: the factors of economic production such as enterprises, land, and capital are owned by the proletariat but managed by the government that allows the people their use and usufruct.