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Banking industry opening continues
By Feng Jie (China Daily)
Updated: 2005-06-07 00:28
China is to press ahead with the opening up of its banking sector, senior
officials confirmed yesterday.
Speaking on the opening day of this year's International Monetary Conference
(IMC) in Beijing, Vice-Premier Huang Ju told delegates reform of the sector
would go ahead.
"China will continue to open up its banking sector to the outside and step up
international co-operation and exchanges," he said.
Huang said China would improve its banking system to better cope with the
increasingly complex international financial environment, Xinhua News Agency
reported.
China intends to strengthen its banking sector by setting up a financial
security system combining banking self-discipline and a mixture of market and
governmental supervision, said Huang.
Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC),
said his commission fully recognized the importance of foreign financial
institutions in the Chinese market.
Foreign institutions have been instrumental in changing the landscape of
China's banking industry and have become an important element in the banking
sector, Liu said.
"Their presence has enhanced competition and brought in much-needed technical
know-how," he told the IMC meeting.
The growth of foreign banks in the Chinese market has accelerated over the
last three years since China entered the World Trade Organization. They have so
far established 244 representative offices and 214 operational branches or
subsidiaries.
By the end of April this year, total assets of foreign banks had reached
US$76.22 billion, including US$28.5 billion in foreign currency loans and US$10
billion in local currency loans.
The faster-than-expected growth has prompted worries from some officials that
local banks are under-prepared to go into competition with foreign rivals. There
had been reports of possible measures to slow down their expansion, but Liu said
yesterday his commission welcomes greater contribution from foreign banks.
"We have good reason to believe that foreign financial firms will expand
their presence," he said.
"We are fully supportive of foreign financial institutions playing a bigger
role in the Chinese banking sector. From our perspective, foreign participation
in local banks and bank restructuring is a win-win option," he
added.
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