The central bank's approval of a deal between the World Bank's private sector arm and a local bank in Nanjing signals that financial authorities have decided to officially open the door for foreign direct investment into China's commercial banks, including the biggest players.
The International Finance Corp (IFC) said it obtained the nod by the People's Bank of China to invest US$27 million in the Nanjing City Commercial Bank, a small shareholding bank in East China's Jiangsu Province, for control of a 15 percent stake in the bank.
Reliable sources said overseas investment has already been marked as a possible reforming tool by the "Big Four" of China's banking sector -- the Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China.
The four, which have been purely State-owned banks until now, are considering various market-oriented options, such as shareholding reform, bond issue and listing schemes, to reform and beef up in the wake of China's entry into the World Trade Organization (WTO), sources said.
These reforming efforts have the blessing of the financial authorities.
(People's Daily November 21, 2001)
