China set to let foreign banks in

Trade pledge requires it to open its banking sector to foreign competition.

    The new guidelines will allow foreign banks to offer Chinese consumers a full range of products and services, including mortgages and credit cards

    Foreign banks will need to set aside at least $127 million in registered capital to establish domestic subsidiaries.

    Richard Yorke, chief executive of HSBC, said the new regulations marked a "historic movement".

    Only a few large international banks, such as Citigroup, are initially expected to set up local entities.

    Some observers have voiced concern that the rules might be implemented in a way to help Chinese lenders buy time before facing head-to-head competition with foreign rivals.

    Officials in the US and EU have demanded that China live up to its WTO pledges and grant full market access.

    Jason Kindopp, head of China research for Eurasia Group, a New York consultancy group, said the main story was "how quickly China is really going to be opening up to the foreign banks".

    SOURCE: Agencies


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