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China may ease limits on foreign banks
By Michele Batchelor/Karen Gullo (Bloomberg News)
Updated: 2005-09-14 07:57
The chairman of Standard Chartered,
Bryan Sanderson, said last Tuesday, when the lender agreed to pay $123 million
for 19.99 percent of newly set-up Bohai Bank, that he would like to see the pace
of liberalization accelerated in China. He also said "a minority stake is fine,
but it would be better if it was bigger."
After joining the WTO in December
2001, China pledged to gradually allow foreign lenders more access to its
banking industry. It has also brought forward some commitments, including last
year allowing foreign banks to start doing yuan business with local companies in
Xi'an and Beijing, a year ahead of
schedule.
Foreign direct investment in China, the world's second-largest
recipient of funds from abroad, fell 3 percent in the first eight months of the
year.
Actual foreign investment fell to $38 billion, the Ministry of
Commerce said on its Web site. Contracted foreign investment, or investment
pledged but not yet used, rose 21 percent from a year earlier to $112.7 billion
as companies including ABB said they plan to build more factories.
China
has attracted $590 billion of overseas investment since 1978 as companies
including Ericsson and Quanta Computer moved production to the nation to take
advantage of low wages.
The fall in investment, triggered by the end of a
three-year expansion by Asian technology companies, may continue at least until
next year, analysts said.
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