Betty Nah, chief executive officer of the Beijing branch of BNP Paribas, said: "The implementation of the rules is a much awaited occasion for Chinese and foreign banks.''

"It is a milestone.''

The Chinese Government should continue to maintain a clear and stable regulated banking environment to further encourage foreign banks to continue to invest and participate in the development of China's banking sector, she said.

Richard Stanley, country corporate officer of Citibank China, said the implementation of the rules is an important measure taken by the Chinese Government to further open its banking sector.

Foreign media have repeatedly expressed doubts as to whether China would carry out its promises to the World Trade Organization (WTO), Stanley said.

"The implementation of the rules proved their doubts were groundless,'' he said.

Citibank will continue to expand its business in China in the coming years, he added.

Raymond Yu, head of China Division of the Bank of East Asia Ltd, said the rules stipulated foreign banks could do more business in the Chinese mainland.

"They are facing bigger development opportunities,'' he said.

However, some other foreign banks expressed their disappointment.

The rules and the foreign banks' expectations have a certain gap, said one representative of the foreign banks, who declined to be identified.

According to the rules published on Wednesday, foreign bank branches must have at least 600 million yuan (US$$72.3 million) in operating capital to qualify to conduct a wide range of businesses.

Qualified foreign banks will be able to conduct all forms of foreign and domestic currency business with foreign and Chinese firms, and with individuals.

Of the minimum 600 million yuan (US$72.3 million) requirement, the branch must maintain at least 400 million yuan (US$48.2 million) in domestic currency and at least 200 million yuan (US$24.1 million) in foreign currency.

Solely foreign-funded banks and Sino-foreign joint venture banks must maintain a minimum registered capital of 1 billion yuan (US$120 million), 60 percent of which in yuan and the rest in hard currencies.

Solely foreign-funded and joint venture non-bank financial companies must have a minimum registered capital of 700 million yuan (US$84.3 million) -- at least 400 million yuan (US$48.2 million) and the equivalent of 300 million yuan (US$36.1 million) in hard currency.

China pledged to allow more foreign financial institutions into the banking sector following its WTO membership on December 11.

It has pledged to let foreign banks conduct yuan business with domestic firms in two years after entering the WTO and with Chinese individuals within five years.

The rules also stated foreign banks with two or more branches in China must appoint a main branch to combine the financial statements of all their branches, giving a complete picture of their operations in the country.

(China Daily February 2, 2002)