North China's Tianjin City, a manufacturing center about 120 km from Beijing, is poised to win back some of the lustre it lost several decades ago as it prepares to open its first national commercial bank. With registered capital of 5 billion yuan (616.5 million U.S. dollars), the Bohai Bank is scheduled to start operation on Feb. 20, 2006. Initially, the bank will focus on business in Tianjin which was once known at a financial centre.
Soon it will expand business to areas around the rim of the Bohai Sea and will gradually establish branches on the Yangtze River and Pearl River deltas and other major economic centers across China.
The bank is reportedly the first national joint-stock commercial bank the State Council, or China's cabinet, approved since 1996. As the first national commercial bank headquartered in Tianjin, the bank is also the first of its kind that ushered in overseas strategic investors in the preparatory stage.
Tianjin Taida Investment Holding Co., Ltd. is the largest shareholder of the bank, possessing 25 percent of the stake. It is followed by the Hong Kong-based Standard Charter with 19.99 percent of the equities.
COSCO, China's leading ocean shipping company, holds 13.67 percent of the stake; and the Shanghai-based Baosteel, China's largest steel producer, and the State Development Investment Co. each hold 11.67 percent.
"Tianjin, used to be a financial hub for northern China and is now an important economic center in the region. We have long expected a state-level commercial bank based in the municipality," said Mayor Dai Xianglong, who was the former governor of the People's Bank of China, the central bank.
"Establishing the Bohai Bank is significant for the development of Tianjin's Binhai New Area," Dai added.
Binhai New Area, accounts for 40 percent of Tianjin's GDP, has been included in China's overall development strategy and in the 11th Five-Year (2006-2010) program of the nation.
The initial scheme of the bank named it Binhai Bank, for it had been designed to provide banking services mainly for enterprises inside the New Area.
Under the current scheme, however, the bank is devoted to areas around the rim of the Bohai Sea at large, which are designed to develop into another pillar of the national economy, following the Yangtze River and the Pearl River Delta.
"The relative backwardness of the financial sector is a damper on the further growth of the local economy," said Ma Junlu, vice president of the economics school under the prestigious Nankai University based in Tianjin.
Tianjin has pinned hopes on the Bohai Bank as it believes it will help propel the development of the Binhai New Area, according to Ma.
A lot of transnational companies have chosen the new area as a manufacturing base and the demand for financial services is great.
Pi Qiansheng, head of the management commission of Binhai New Area, is confident in its future. "As Binhai New Area has become an important part of China's national development strategy, more and more foreign enterprises and banks will enter the area," Pi said, adding that the Hong Kong and Shanghai Banking Corp. based in Hong Kong had set foothold in Binhai, together with a bank from the Republic of Korea.
To develop Binhai into a driving force for economic growth in the around-Bohai-Sea areas, a Binhai Industrial Development Fund has been approved by the State Development and Reform Commission. It will be the first industrial development fund in China, involving 20 billion yuan (2.5 billion U.S. dollars).
Nonetheless, the prestigious economist Wu Jinglian, said to boost the development of Tianjin and its Binhai New area," it is crucial to improve relations between the city and other areas around the rim of the Bohai Sea, particularly relationship between Beijing, Tianjin and Hebei."
Last year, Beijing and Tianjin jointly announced that over the next three years they will invest more than 10 billion yuan (1.2 billion U.S. dollars) building or upgrading railways, expressways and airports to achieve more efficient links between the two.