BIZCHINA / Biz Life
No rush
(China Daily)
Updated: 2006-12-11 08:39
Will Chinese residents turn to foreign-funded banks next year?
In a recent survey of 3,384 persons conducted by the China Youth Daily,
10.8 per cent say they will go to overseas banks.
More than 72 per cent of those surveyed say they will stay with domestic
banks, and 16.4 per cent are taking a wait-and-see attitude.
Related readings:
8 foreign banks apply for registration Reports: Policy bank to reform
China's bank regulator issues reform guidelines
Ten foreign-funded banks to incorporate locally
More than 85 per cent of those surveyed say they have paid attention to
the news that foreign banks will be allowed to offer renminbi business to
Chinese residents under the new regulations.
The survey findings partly reflect the fact that the opening of the
banking sector marks a historic step in China's gradual opening of the
financial sector, but overseas banks are unlikely to have an immediate
impact on the domestic banking market.
"It is clear that foreign banks will increase their network expansion
when allowed to do all renminbi businesses," says Zhao Xijun, a financial
professor from Renmin University of China.
"Their growth will bring hotter competition to the domestic banking
market and further pressure on Chinese commercial banks," he says.
However, all-out competition will not emerge in the short term, he says.
"The focus will be on good corporate clients and increasing the number of
high-end individual customers," Zhao predicts.
A Moody's report on the outlook of China's banking sector agrees with
Zhao.
The report says overseas banks have the competitive edge in foreign
currency business with multinational corporations for trade finance,
treasury, and, probably, cash and risk management.
1 2 3
(For more biz stories, please visit Industry Updates)
Learn mandarin
