Tuesday, August 30, 2011

Foreign banks can conduct RMB business in Chengdu

Two years after China's accession to the World Trade Organization, foreign banks will finally be able to conduct renminbi business with Chinese enterprises, a key weapon to enhance their competitiveness in the Chinese market.
The China Banking Regulatory Commission (CBRC) announced on its website Thursday that starting from December 1, foreign banks can provide renminbi services to Chinese enterprises in cities that have already opened up the local-currency business.
Another four cities - Ji'nan, Fuzhou, Chengdu and Chongqing - will be added to the list on the same date, bringing the total number of such cities to 13, though foreign banks still have to apply for licenses in each city.
China had promised to allow foreign banks to do renminbi business with domestic enterprises two years after it became a member of the global trade body; and to remove all geographical and customer restrictions in five years.
Liu Mingkang, chairman of CBRC, said in August that the Chinese authorities would grant equal treatment to foreign banks in the future.
Besides setting up branches and applying for renminbi licenses, foreign banks are also encouraged to buy shares in domestic banks, which helps them enter the Chinese market indirectly.
At the end of July, foreign banks had set up 211 representative offices and 151 branches but they controlled only a small ratio of the domestic banking market.

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