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China to Open 10 Regional Private Banks
In order to counter the impact on financial market brought by China's entry into the WTO, China will establish a group of new private banks wholly owned by private enterprises and open 10 regional private commercial financial institutions on a trial basis.
Presently, China has only one private commercial bank, namely, Minsheng Bank, which has 88 branches across China set up on the basis of upgrading and restructuring city credit cooperatives. Though part of its capital comes from the people, it still has the tinge of the local governments who hold the dominant rights and interests. However, other commercial policy-related banks are all run by the government.
China will permit individuals and private enterprises to buy shares of private banks on a trial basis in order to raise the private finance's share of the market, this will be a major breakthrough in China¡¯s banking business.
According to the agreement reached between China and the United States last November, two years after China's accession to the TWO, all of the foreign banks can deal in the business of RMB in the designated urban districts and regional restriction will be lifted five years later. It's anticipated by quite a few people that the State-own banks wouldn't be able to cope with the increasingly furious competition. Nevertheless, these new types of banks invested by private enterprises and individuals will assist them in jointly resisting the competition from outside.
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