China Streamlines Rules To Attract Foreign Banks
BEIJING - China's central bank has published streamlined regulations that make it easier for foreign banks to establish representative offices here, Chinese officials said.
Under the revised rules from the People's Bank of China, a foreign bank need no longer establish its first representative office in Beijing but rather may choose any open Chinese city.
The central bank also eliminated regulations requiring foreign representative bank offices to reregister with the government every three years.
Banks may now submit applications to establish offices at any regional branch office of the People's Bank, avoiding bureaucratic logjams at the main office in Beijing. The revisions took effect immediately.
"This is designed to eliminate unnecessary problems for foreign banks," said a Chinese official familiar with the new rules.
Foreign bankers said the revised regulations would help to attract more overseas institutions to China, particularly to the coastal regions that are seeing the quickest jump in economic development.
"This is going to help enormously," said one foreign banker in Beijing.
"Many banks really want to be in Shanghai and Guangzhou [Canton], where things are happening. So they will be happy not to have to set up in Beijing first."
Fuller Revision Expected
But he said that before entering the market, some bankers are awaiting a more complete revision of China's banking laws, which they expect by the end of the year. "There are so many gray areas now, it is really quite difficult," he said.
A major complaint among foreign bankers is that China's current regulations are unclear on the division between representative offices and bank branches, which are far more lucrative.
Representative offices, which are not allowed to do deals, must pass on any business contacts to branches outside China.
Though only about 18 foreign banks have opened branch offices in China, there are more than 100 representative offices in Beijing, many waiting to become full branches.