Preparatory work is underway to set up a Bohai Bank in this port city and industrial center of north China, in a bid to turn the city into a banking hub for the area around the Bohai Bay Rim.

The municipal government of Tianjin recently announced that the scheme had won approval of the State Council, or the Chinese central government.

The bank will be the first national joint-stock commercial bank to be approved since 1996, and will also be the first of its kind to be headquartered in Tianjin, city government officials said.

The founding of the Bohai Bank will be part of the on-going banks' restructuring in China and will be in conformity with the economic growth trend of the area around the Bohai Bay Rim, industry insiders said.

The Hong Kong-based Standard Chartered (Hong Kong) Banking Ltd. will become the second biggest shareholder of the planned Bohai Bank with a 19.99-percent stake holding, according to a framework accord signed between the international bank and the leadership team on the preparatory work for the Bohai Bank.

It was the first time for a Chinese commercial bank to usher in a strategic investor from overseas in its preparatory stage, the team said but did not disclose who would be the top shareholder of the planned bank.

Byran Sanderson, chairman of the Standard Chartered, said he was "very pleased" that his bank would be one of the sponsors and the only overseas shareholder of the Bohai Bank. The Hong Kong-based international bank, which plays a vital role in emerging markets worldwide, will pool its global resources to provide across-the-board technical support for the new bank, Sanderson said.

Ma Junlu, deputy head of prestigious Nankai University's Tianjin-based Institute of Economy, acknowledged that foreign participation will help China import the advanced managerial expertise of international modern banks and optimize the equity mix of Chinese commercial banks.

The Bohai Bank will also boost the growth of financial services in the area around the Bohai Bay Rim, which is evolving into a new economic engine following the model of the Pearl River Delta and the Yangtze River Delta, Ma said.

Tianjian had been a banking center in northern China before the former planning economy denied the city's role as a banking power, Ma said. The senior economist said he believed the upcoming Bohai Bank will help the city -- which maintained a double-digit economic growth in each of the past 10 years -- regain its status as a financial hub.

There is now only one joint-stock bank -- Minsheng Banking Ltd.-- and branches of big commercial banks in Tianjin.

The new Bohai Bank will initially do business in Tianjin and open branches in major economic growth areas around China, including the Yangtze River Delta and the Pearl River Delta, the preparatory work team said.