foreign ownership in 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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