SHANGHAI - The government of China's southern city of Guangzhou is seeking to sell a 20 percent stake in Bank of Guangzhou to a foreign investor for as much as $850 million, a person with knowledge of the matter said.

Bank of Guangzhou, the city's seventh-largest lender, has allowed due diligence by potential buyers including Groupe BPCE, France's second-largest bank by branches, and Bank of Nova Scotia, Canada's third-largest lender.

Foreign investors have announced plans to inject more than $16 billion into Chinese lenders since the start of 2006 as the country's GDP more than doubled.