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China: WTO deadline on banking to be met
(AFP)
Updated: 2005-12-05 22:09
The qualified foreign institutional investor program will remain the preferred method of bringing Western banking expertise and capital into China's banking sector, Liu said.
Under the program, foreign banks are seeking to snap up equity stakes in major Chinese banks ahead of the full opening of the sector but they are limited to a maximum single holding of 20 percent and a combined 25 percent.
The CBRC has also set up regulations that limit the extent foreign financial institutes can control Chinese banks and worked to cushion the domestic sector from global competition.
As part of these restrictions, Liu confirmed that 5.0 percent would be the minimum limit for a strategic investment in a Chinese bank.
Foreign banks will also not be allowed to hold stakes in more than two Chinese banks at the same time.
"In order to avoid a conflict of interest and to avoid market monopolization ... (foreign banks) cannot invest in more than two commercial banks," Liu said.
Liu said a decision on whether to allow Singapore's Temasek to buy into the Bank of China was very close, but stopped short of confirming that Temasek's 3.1 billion dollar bid for a 10 percent stake in Bank of China had been approved.
"So far as I know, the relevant state-owned commercial bank is having excellent consultations with Temasek," Liu said.
"I think it (a decision) is close, very close."
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