Qualified overseas investors are welcomed to join the reshuffle and transformation of China's banking industry, if based on willingness and related commercial rules, according to the China Banking Regulatory Commission (CBRC).

Individual foreign-funded shareholders of China's banking organizations is allowed to raise their shares from previous 15 percent to 20 percent, said an official in charge with CBRC, who declined to give his name.

Domestic banks, who have absorbed foreign investment, will not change their ownership nature and business scope, if the proportion of invested foreign capital is kept under 25 percent, said the official.

Recently, foreign banks have been approved to apply directly to CBRC for setting up branches and representative offices in China.

Formerly, their application must be turned over by local banking watchdogs Meanwhile, CBRC has also authorized local banking regulatory departments to verify the qualification of branch heads or regional chief-representatives newly replaced by foreign banks.

The official pointed out that foreign banks not only bring about capital, technologies and new products to China, but also demonstrate domestic state-owned commercial banks the most advanced operation and management mechanism of modern banks.

"Their entry into China has intensified pressure on state-owned banks, which urges them to deepen reforms to narrow gaps," he said.

According to him, CBRC has pledged to gradually lift restrictions on foreign banks in clients as well as in business and region ranges, in line with the timetable of China's commitment to the World Trade Organization (WTO), and to promote opening-up of the banking industry for a fair and reciprocal environment between home and foreign banks.

By March 2004, China has seen 62 overseas banks from 19 countries and regions establish 195 branches in mainland, among which 88 are approved to run RMB business. Foreign banks also set up 213 representative offices in China.

The total assets of foreign-funded banks in China have reached 53.6 billion US dollars, accounting for about 1.6 percent of the whole of all China's banking organizations.

The RMB business of overseas banks is expanding rapidly in China, as their total capital of RMB has kept rising at an annual two-digital growth rate and reached 78.5 billion yuan (9.5 billionUS dollars) so far.

Source: Xinhua