Individual foreign-funded shareholders of China's banking
organizations will be allowed to raise their stakes from 15 percent
to 20 percent, said an official with the China Banking Regulatory
Commission (CBRC), who declined to give his name.
Foreign-invested domestic banks will not change their ownership
structure or business scope if the proportion of foreign capital is
kept under 25 percent, said the official.
Recently, foreign banks have been allowed to apply directly to
CBRC to set up branches and representative offices in China.
Formerly, their applications had to be submitted first to local
regulatory authorities.
CBRC has meanwhile given permission to these local authorities
to verify the qualifications of new branch heads or regional chief
representatives of foreign banks.
The official said that foreign banks not only bring capital,
technologies and new products to China, but also demonstrate to
domestic state-owned commercial banks the most advanced operations
and management systems.
"Their entry into China has intensified pressure on state-owned
banks, spurring them to deepen reforms," he said.
CBRC has pledged gradually to lift restrictions on foreign banks
in terms of clients as well as in business and region, in line with
the timetable of China's commitment to the World Trade
Organization. The commission will promote the opening of the
banking industry for a fair and reciprocal environment between
domestic and foreign banks.
By March 2004, 62 overseas banks from 19 countries had
established 195 branches on the mainland. Eighty-eight have been
approved to conduct RMB business. Foreign banks have also set up
213 representative offices.
The total assets of foreign-funded banks have reached US$53.6
billion, accounting for about 1.6 percent of all China's banking
organizations.
The RMB business of overseas banks is expanding rapidly. Total
RMB capital has risen in the double digits for several years and is
now at 78.5 billion yuan (US$9.5 billion).
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(Xinhua News Agency May 31, 2004)