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.

Source: China Daily