"China's Banking Sector Faces Post-WTO Challenges"

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Last updated at: (Beijing Time) Tuesday, January 01, 2002

"China's Banking Sector Faces Post-WTO Challenges"

China's banking sector has taken concrete steps already to meet the challenges brought about by the country's accession to the World Trade Organization (WTO).

China's banking sector has taken concrete steps already to meet the challenges brought about by the country's accession to the World Trade Organization (WTO).

The Shanghai Bank welcomed three international shareholders last week, including the global banking giant Hong Kong and Shanghai Banking Corporation (HSBC) and the International Finance Corporation (IFC) under the World Bank, which hold 8 percent and 7 percent respectively of the Shanghai Bank's shares.

Overseas equity now takes up 18 percent of the bank's total capital, according to a bank source.

Fu Jianhua, president of the bank, described the move as "an attempt to seek cooperation and a win-win partnership between domestic and overseas banks in the post-WTO scenario".

He also expressed the hope that the global network of HSBC and IFC will help the Shanghai Bank to improve its competitiveness and to further tap the international market.

Most overseas banks see massive potential in the Chinese market.

"HSBC is eager to seek further business development in China's interior regions," said a senior executive of HSBC, who described the cooperation with the Shanghai Bank as a "new milestone".

Banks and other financial institutions in Zhejiang Province, another economic powerhouse in east China, have also stood up to face the new challenges.

In light of the tough competition brought by international rivals that have fought their way into the market, state-owned commercial banks in Zhejiang have stepped up efforts to improve their management and upgrade their services.

Under an agreement with the local economy and trade department, the Zhejiang branch of the Bank of China has offered to foster local manufacturing enterprises by extending loans at low interest rates.

Meanwhile, nearly all the commercial banks in Zhejiang have offered mortgaging services and different types of loans to finance small and medium-sized enterprises.

Amid the competition between domestic and overseas banks, the People's Bank of China, the central bank, has enhanced supervision of the banks' internal control mechanisms and the business activities of senior executives.

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