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New rules to manage foreign banks
(Agencies)
Updated: 2005-04-27 11:50 The China Banking Regulatory Commission (CBRC) is
considering introducing new rules to manage the expansion of foreign banks in
the domestic market, said Shi Jiliang, vice-chairman of the CBRC.
The CBRC may introduce rules to encourage foreign banks to establish
branches in the poorer central and western regions of China to 'reduce excessive
competition between foreign and Chinese banks' in the more prosperous eastern
provinces.
It is also considering banning foreign banks from buying equity stakes in
more than two major Chinese banks, and further specifying the definition of
foreign strategic investors that are being encouraged to participate in China's
banking reform.
The new measures are aimed at restricting the 'pace and geographic extension
of foreign banks' market entry so as to leave some time and space for Chinese
banks to embrace the full-scale competition.'
However, China will still fulfil its commitments to the World Trade
Organization, which requires China to fully open its financial sector to foreign
banks by the end of 2006.
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