Four overseas banks have received the green light for their
Shanghai branches to prepare to offer Renminbi business to Chinese
enterprises, a significant breakthrough in China's banking market
liberalization.
The banks -- Citibank, Hong Kong and Shanghai Banking Corp
(HSBC), the Hong Kong-based Bank of East Asia and Japan's Mizuho
Corporate Bank -- were among the first five groups to apply to
conduct Renminbi business with Chinese enterprises, said Zhang
Rongfang, an official? with the Shanghai Banking Regulatory
Bureau.
By the end of last year, 11 foreign banks had handed in their
applications.
The move is in accordance with China's World Trade Organization
(WTO) commitments. It joined the trade bloc in 2001. Under the WTO
pact, China said it would allow foreign banks to handle Renminbi
business for Chinese enterprises two years after its entry.
"The move allows us to enter a business arena with enormous
potential," said Dandan Chang, spokeswoman of HSBC in China, which
received approval from the China Banking Regulatory
Commission (CBRC) on Friday.
Although only its Shanghai branch is able to conduct Renminbi
services with Chinese enterprises, HSBC can actually provide the
services in all 13 Chinese cities that are open to foreign banks,
as well as Jiangsu
and Zhejiang
provinces.
"But we still hope our additional applications for our six other
branches will be approved soon," Chang added.
According to the CBRC's provision, all of the successful
international banks should be prepared for inspection in four
months. After that, they will receive the final license to serve
their Chinese clients.
"Given our seven years' experience in offering Renminbi business
to foreign clients, we have a sophisticated team already involved
in conducting Renminbi business. I think it will take us less than
four months to be prepared for the new business," said Chang of
HSBC.
So far, foreign banks are able to handle foreign currency
business with Chinese enterprises and individuals.
(China Daily February 12, 2004)
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