China will open up the banking sector wider, on condition of strengthened regulation, by allowing qualified private capital to set up small- and medium-sized banks, the Communist Party of China (CPC) said in a landmark policy document released on Friday.

The lengthy policy document -- officially named "a decision on major issues concerning comprehensive and far-reaching reforms" -- was approved by the Third Plenary Session of the 18th CPC Central Committee, a four-day key meeting which ended on Nov. 12.