US pushing for more open markets in China
(chinadaily.com.cn)
Updated: 2005-10-16 09:12

Under current Chinese laws, foreign investors are prohibited from owning more than 25 percent of a commercial bank, and no single foreign investor can own more than 20 percent.

According to a document that Treasury officials plan to circulate among Chinese officials, the Bush administration would persuade Beijing to remove the limits on foreign ownership of its banks.

US Treasury Secretary John Snow listens to Chinese Finance Minister Jin Renqing's opening remarks at the 7th G20 Finance Ministers and Central Bank Governors meeting in Xianghe, Hebei province, China Saturday Oct. 15, 2005.[AP]

Also, foreign financial institutions that want to buy Chinese securities would be freed from having to have at least $10 billion in assets and to have been in business at least five years. Foreign-affiliated banks, brokerage firms and insurers would be freed from restrictions on setting up multiple branches at one time.

Secretary Snow has been arguing that China needs to learn from the Americans to get people to spend more and save less. Administration officials say that a financial overhaul plan would help make that happen in China.

Andrew Rothman, a Shanghai-based strategist at CLSA Asia-Pacific, a brokerage firm, said that China had already embraced many of the ideas that Secretary Snow was promoting and that consumer spending has grown sharply in the past few years.

Retail sales in China have been climbing about 10 per cent a year for the past several years, he said. Household credit, virtually nonexistent five years ago, now accounts for 16 per cent of all outstanding credit.