foreign ownership in chinese banks
According to the China Banking Regulatory Commission, 19 different overseas financial institutions have stakes in 16 Chinese banks.
This statistic was given by Tang Shuangning, the vice chairman of China Banking Regulatory Commission at the Sino-Japan economic forum on October 9th, 2005.
Foreign capital into Chinese banks have primarily gone into
- state-owned banks,
- joint stock banks, and
- city commercial banks
Of these, the city commercial banks have been spreading in the east coastal areas and mid-west of China.
According to Tang, the co-operation has proceeded in two distinct phases.
As the first phase, the co-operation is mainly business collaboration, including borrowing, clearing, and bill discounting services.
As the second phase of co-operation, foreign financial institutions take partial ownership in the Chinese banks.
According to the Chinese rules of law, a single foreign business entity can hold up to 20% of its Chinese partner, but a consortium can hold as much as 25%.
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