Despite Beijing's efforts to encourage foreign commercial activity, U.S. banks still face obstacles in setting up operations in China, the House Banking Committee was told last week.
"Market access for U.S. and foreign business is inhibited by Chinese government measures to protect its state-run economy," said JayEtta Z. Hecker, associate director of international relations and trade issues in the General Accounting Office's national security and international affairs division.
The Treasury Department says China has taken steps to let foreign financial institutions become more active in its economy - steps that include gradually expanding the number of cities and special economic zones in which they may apply for banking licenses.
However, the institutions can conduct transactions only in foreign currency, Ms. Hecker told lawmakers during a hearing on the implications of China's economic ascendance for U.S. financial institutions.
- Stephen Coplan, Medill News Service