Yang Zilin, president of the bank, said the WTO entry means China's opening process has entered a new historical period.

"More foreign banks will enter the Chinese market after the accession," Yang said. "This means competition will become fierce in all sectors of business including the export credit business."

The localization of personnel in foreign banks will also take away some of our quality staff, he said.

Some domestic foreign trade companies may go bankrupt as a result of this competition, reducing the number of current clients, he said.

"China Exim Bank will have to deepen reform and speed up development to establish a foreign trade and foreign investment support system which is in line with international practices," Yang said.

The bank will also be required to enhance management, improve asset quality, minimize financial risks and speed up establishment of a market-orientated personnel system, he said.

Yang noted China's accession to the WTO also means the country will become more involved in the globalization of economy.

"Export credit will play an even greater role in this process," he said.

It is predicted that exports of China's machinery and electronics products and high-tech products will grow at an average annual rate of more than 10 per cent in coming years. This means Chinese companies will demand more financial support for their exports, Yang said.

China Exim Bank will continue to give key support to companies which sell their products abroad.

"China Exim Bank will also provide quality and highly efficient financial services for Chinese companies which invest in foreign countries," Yang said.

China has sufficient foreign exchange reserves, which are beneficial to supporting companies with competitive advantages to "go out," Yang said.

China Exim Bank will expand loan services to companies which engage in processing trade or contract projects in foreign countries, he said.

The bank will also support Chinese companies to contract projects or engage in resources exploration and manufacturing business in countries to which the Chinese Government offers preferential loans, he said.

The central government has already implemented a series of policies to support Chinese companies setting up subsidiaries overseas.

China set up about 6,000 investment companies in 160 countries and regions by 2000, involving an investment sum of US$7 billion.

But China's investment business in foreign countries is still in its infancy, experts said.

Chinese companies' foreign investment only accounts for 0.15 per cent of foreign investment worldwide.

"We have to expand the business step by step," Yang said.

(China Daily November 12, 2001)