Slow boat to China: WTO membership and foreign bank interest in China ensure a changing landscape for its banking community, but a difficult task lies ahead in getting the slow boat to move faster. (Comment).

Banker, The, March, 2002

CHINA'S FINANCIAL SECTOR has arrived at a critical point. The country's recent entry into the World Trade Organization has triggered a wave of activity that will allow foreign banks far greater opportunities in the huge domestic market. The recent acquisition of 8% of Bank of Shanghai by HSBC and the agreed timetable (over five years) with foreign banks to allow them to transact renminbi business are significant events, but their importance should not be overstated. Foreign banks now account for only 2% of the banking market and are not expected to reach even 10% by 2007.

Bone and flesh

The key issue facing China's banks is much more than foreign competition. It is the core relationship between government, ownership and management. Although the chief...

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