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A Yangtze River Delta Financial Zone concept - with a focus on regional banking service integration - has emerged from Shanghai's push to become an international financial center, a local banking authority says.
"We (the Shanghai and Nanjing branches of the People's Bank of China) are set to jointly work out a detailed feasibility study report on the topic by the year end," said Wang Xinxin, director of policy studies under the Shanghai Bank of the People's Bank of China, the country's central bank.
The administration of the two branches covers the whole delta region, which is regarded as China's largest economic bloc.
Wang told China Daily that the establishment of the delta financial zone aimed to better serve the economic integration process in the region, which embraces 15 major cities.
The booming private sector in the Jiangsu and Zhejiang provinces in the delta also demands integrated banking services, Wang said.
Currently, the branches of the big four State banks in Jiangsu, Zhejiang and Shanghai are mostly restricted to each of their areas of business.
And city commercial banks from different cities in the delta are not allowed to expand their services outside each of their business areas.
"We are now doing theoretical studies to break such separation and feasible suggestions will be raised by the year's end," Wang said.
But the central government will be responsible for the formal approval and control of the implementation timetable.
Pan Zhengyan, a finance expert with the Shanghai Academy of Social Sciences, said the establishment of the financial zone would be a tendency towards economic integration in the region and also a pre-requisite for Shanghai to become an international financial center.
Currently, the biggest hurdle for the concept is the separation of banking services, which are restricted by policies under administrative structures, according to Pan.
A possible way out is to restructure the big four State banks by establishing their regional headquarters in the delta to provide integrated services locally, Pan said.
In addition, strong city commercial banks, like the Bank of Shanghai, will be allowed to expand their services to the whole region under the zone concept, Pan said.
(China Daily June 11, 2003)
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