China's WTO Updates
Central Bank to Increase Supervision Transparency After WTO Entry

Chinese banks must try their best to improve assets quality to adapt themselves to stricter supervision demands, facing new products, new businesses brought by foreign banks, and supervision departments will have to explore feasible measures.

So far, the total assets proportion of foreign banks in China accounts for 2 percent that of banks' of China, with their foreign exchange loans and foreign exchange deposit rate making up 23 and 5 percent, respectively.

After China's entry into the WTO, restrictions will be lifted for Chinese enterprises to loan from foreign banks, said Wu Xiaoling. Supported with the good services of foreign banks, it is beyond doubt that foreign exchange loan market share will increase, but the scale of foreign exchange loan will be depended on the interest rate of international financial market. The central bank will follow the principle of precaution to properly control fund amount borrowed from foreign banks and encourage foreign banks to issue loans by way of attracting foreign exchange deposit. Foreign banks will also experience rapid development owing to their better service in international settlement.

Wu stressed that foreign banks will be both partners and rivals for Chinese counterparts, which will greatly motivate China's banking development. Foreign banks will pose competition against the Chinese side in its ability of winning excellent clients and good management with regard to talent attraction and both sides will pin their points on attracting more outstanding graduates while both will have more opportunities for cooperation too. Chinese banks can learn the advanced experience from their foreign counterparts and learn how to use network technology to carry out informationization management and learn how to expand market. Foreign banks can also fully utilize Chinese banks' mass business nets to conduct wide range of cooperation with Chinese banks.

(People's Daily December 4, 2001)

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