No room for complacency on bank reform
(Shenzhen Daily/Agencies)
Updated: 2005-11-04 10:35

China has made progress on banking reform since 2003, culminating in the listing last month of China Construction Bank Corp., but cannot afford to be complacent, central bank governor Zhou Xiaochuan said.

In a speech to a financial conference in Beijing on Wednesday, Zhou did not discuss either the yuan or the outlook for China's economy.

"There's a long way to go in the reform process," he said of China's efforts to purge banks' balance sheets of bad loans stemming from decades of politically directed lending.

China would press on with the opening of its financial markets in line with pledges it gave when it joined the World Trade Organization in late 2001, Zhou said.

Restrictions on foreign banks’conducting yuan business with domestic clients and setting up branches will be lifted at the end of 2006 when a five-year transition period accorded to China runs out.

Foreign banks were taking different approaches to penetrating the domestic market, Zhou noted. Some were setting up their own branches, while others were buying stakes in Chinese banks, especially smaller ones.