The upper limit of foreign funds in a Chinese bank remains at the pre-WTO level of 25 percent, and the limit for one foreign investor in a bank remains 20 percent, said China's central bank governor Zhou Xiaochuan.
Major international banks have been entering China's banking sector through capital injection since the central government began to take drastic reforms to the financial sector five year ago.
Zhou said there is no statement concerning the proportion of foreign capital in Chinese banks in China's commitment to the World Trade Organization (WTO).
"During China's WTO-admittance negotiations, almost no nation or major financial institution raised requests in this regard," he said, explaining that that was because the problem of non-performing loans of Chinese banks were frequently disclosed.
As a result, negotiations concerning the banking system mainly focus on rules regulating the construction of branches and the procedure of Renminbi business opening, he said.
In recent years, Zhou said, foreign banks have shifted from setting up subsidiary banks in China to injecting capital into Chinese banks, as they have found it time and energy-consuming to construct a complete network in such a huge economy like China.
Some foreign banks have even targeted poor-performing small and medium-sized banks, he said.
In this case, it is inevitable for some financial institutions to raise requests concerning the investment proportion, said Zhou.
(Xinhua News Agency November 4, 2005)
