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| WTO Accession: More Opportunities for Financial Sector |
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MON, NOV 12, 2001
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China's accession to the World Trade Organization (WTO) will have a far-reaching effect on the opening and development of the financial market and will bring more profit-making opportunities to financial institutions, both Chinese and foreign, banking insiders in Shanghai said.
"More foreign direct investment will pour into China, and more local enterprises will engage in globalized procurement, production and sales activities," said Jiang Jianqing, governor of the Industrial and Commercial Bank of China (ICBC). "This will demand innovation, better services and high-caliber professionals."
According to Jiang, domestic financial institutions will become internationalized, as they are to provide financial service packages in line with global practice.
As China's No. 1 commercial bank, ICBC ranks seventh in the world with a capital of 4.2 trillion yuan (506 billion U.S. dollars), 5 percent of which is operating overseas.
The bank has 34 billion U.S. dollars of foreign exchange assets, and its annual international settlement reached 75 billion U.S. dollars last year, said Jiang, attributing this to the new profit-making opportunities brought by the economic globalization.
Other insiders say domestic financial institutions have cemented cooperative ties among themselves in preparation of the post-WTO competition.
The State Development Bank recently reached a deal with the Shanghai-based Pudong Development Bank on the exchanges and cooperation in financing, settlement, loans and distribution of bonds.
China Import and Export Bank has also signed a comprehensive agreement with ICBC.
"Enhanced cooperation will benefit everyone," said an observer.
"China will remove, step by step, its control on finance and foreign exchange after the WTO accession," said Toru Mitarai, head of the Shanghai Branch of Japan's Sanwa Bank Ltd., one of the first foreign banks to enter the Chinese market. "Foreign banks will face less restrictions."
According to WTO rules, China will gradually lift its restrictions on foreign financial institutions in the five years after its accession, including the local and foreign currency services for its residents and domestic enterprises.
"National treatment for foreign banks will attract more transnational financial institutions, as the costs for business expansion will go down against the increasing demand for financial services and the further opening of the Chinese market," said Mitarai.
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