Klaus Koehler著

WTOを結合した後一致そして改良

WTOが中国によってが参加したときに、構成は国の銀行ビジネスに関する特別な義務に従うために中国を要求した。 中国は2001年- 2006年からのWTOを参加した後5年以内の外国の銀行に銀行セクターを完全に開けることに同意しなければならなかった。 中国はとりわけ一致した、それ外国の銀行が外国通貨ビジネスを市場アクセスか国民の処置の限定なしで達成し、ある特定の地理的な制限に応じて外国投資された会社および外国の個人との外国通貨ビジネスを、行なうようにする。 WTOを結合した後2年、外国の銀行は特別で地理的な限定に応じて、そして中国がすべての地理的な制限を解除することに同意する5年以内に中国の会社との国内通貨ビジネスを行なえたべきである。 中国によってはまた外国の銀行が中国同等と同時に財政のリースサービスを提供することが一致した。

但し、中国は一致の実行で遅かった。 2002で中国の人々の銀行はWTOの責任に合わせるために規則と共に外国資金を供給された銀行を支配する規則を出したが、PBOCは銀行セクターの開始で非常に用心深かった。 この状態は市場を書き入れ、存在を拡大することを外国の銀行が困難にした。 To give an example, the PBOC allowed foreign-funded banks only to open one branch every 12 months. Of course this resulted in pressure from countries such as the USA, Australia, Canada Japan and several European countries. Therefore the PBOC announced in December 2003 that foreign banks were permitted to conduct domestic currency business with Chinese companies and the working capital requirements for foreign banks were reduced.

In July 2004 capital requirements for foreign banks in other categories were reduced and the China Banking Regulatory Commission (CBRC) issued the Implementation Rules for the Administrative Regulations on Foreign-Invested Financial Institutions, which removed among other things the restriction to open only one branch every 12 months. In December 2004 the CBRC allowed foreign banks to opened branches in an additional five cities for and to process local currency business, including Xian and Shenyang. This allowed them to be ahead in the commitments towards the WTO. Foreign banks were now allowed to conduct local currency business in 18 Chinese cities.

Up to the end of May 2006, 71 foreign banks established 197 branches in China. Currently they are allowed to conduct local currency business in 25 Chinese cities. After a slow start, China has only until the 11th of December 2006 to fulfill the WTO agreements at which point China will have to open the banking sector for all foreign banks in every region of the country.

As it stands however, any foreign bank looking to gain a foothold in a city must open a representative office, which can offer only advisory, non-profit making services, in the city and maintain it for two years.

Only then can it apply to open a branch office and actually start doing business. While the representative office rule has been lifted in western China to encourage investment and the government has indicated this could soon extend nationwide, branches have experienced further delays when applying for local currency trading licenses. A minimum capital requirement of USD 62 million must also be met to open a full service branch.

Advantages for Foreign Banks

Once China opens the banking market to foreign banks, those already established on the market have an advantage. This can also be seen with the large number of representative offices that have been opened in the last few years by foreign banks.

Retail Banking

It is said that the best way for foreign banks to enter the China market is through retail banking, as the local Chinese banks are generally weaker in this sector. In addition, it is expected that much of the future growth and profitability will come from retail, small-business lending and fee-based businesses. Generally speaking, foreign banks have better skills and are more experienced in this area than Chinese banks, which concentrate more in the traditional areas of banking such as deposits and lending. Many of the Chinese banks do not invest time and manpower in their customer relations. Considering 1.3 billion Chinese people have approximately a total of USD1.65 trillion on saving accounts, this is a key mistake. Many local banks do not know their affluent clients and this presents a chance for foreign banks who have an immediate advantage with their experience.

Because affluent customers are highly concentrated geographically, foreign banks only have to provide a small number of branches in the big cities to target these customers. Surveys show that the demand for better services is very high, and customers are unsatisfied with the services of local Chinese banks. Therefore customers would rather go to a foreign bank even if they have to pay higher fees or interest rates.

Credit Card

A hot sector in the bank market is the credit card market. It is expected that banks will get soon the permission to issue their own credit cards, which will give them access to a market, which is worth USD 40 billion. Credit cards are more and more in demand in the Chinese culture, but local banks lack of experience. In addition, with credit cards from local banks, customers are only able to pay in renminbi and no other currencies.

But what is the best way to access the market? The best and easiest way for foreign banks to enter this sector is by joining a partnership with a local Chinese bank. On one hand, Chinese customers prefer the service of a foreign bank but on the other hand, 66 percent of card holders choose to pay their bills cash at bank branches or pay them at the automated teller machines. Chinese banks have an existing network of branches spread over the country with the technical facilities. Figures show, that the most effective way to acquire new customers for credit cards is to visit companies and provide incentives for staff. Almost half of all credit card holders sign up if a bank representative visits their workplace and if there is an already established corporate relationship; larger local Chinese banks have an additional advantage in this area.

It is therefore easier for foreign banks to become a partner of a local bank and to benefit from the existing network. Currently, foreign investors are only allowed to have a stake up to 20 percent in a local bank, however if more than one foreign bank or investor is involved, a total of 25 percent can not be exceeded. This regulation is expected to change with ongoing reforms.

Outlook for the Future

In general, China’s banking system does have a prosperous outlook. With the WTO pushing for the opening up of the banking industry, China is implementing regulations for foreign banks to access slowly all areas. This means for local banks in order to stay competitive, they have to “clean up” their long term problems as many are heavily loaded with non-performing loans. Recognising the problem China already decreased slowly the loans since opening their bank sector step by step. Local banks are getting better and better in setting their risk management, and already are becoming more competitive.

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Klaus Koehler, Managing Director, Klako Group