Some international analysts speculated in 2006 that China would tighten foreign investment controls, but the Chinese government insists that it is doing the exact opposite.
The China Banking Regulatory Commission (CBRC) announced on Sunday it had approved applications from nine foreign-funded banks to transform their Chinese branches into locally incorporated banks registered on the mainland. The move is seen as proof that the government is fulfilling its commitments to greater flexibility in the financial sector.
The nine banks, all to be registered in Shanghai, are the Standard Chartered Bank, the Bank of East Asia, the Hong Kong and Shanghai Banking Corp., the Hang Seng Bank, the Mizuho Corporate Bank, the Bank of Tokyo-Mitsubishi UFJ, the DBS Group, Citibank and the ABN Amro Bank.
The announcement followed the promulgation of new regulations on the administration of foreign-funded banks that took effect on Dec. 11, the fifth anniversary of China's accession to the World Trade Organization (WTO).
Under the regulations, China will allow foreign-funded banks to conduct Renminbi business for Chinese citizens in line with its commitments to the WTO.