China: WTO deadline on banking to be met
(AFP)
Updated: 2005-12-05 22:09

China will open up its banking sector on schedule next year, the nation's top bank regulator said as he warned the government will no longer inject fresh capital into unprofitable banks.

China Banking Regulatory Commission (CBRC) chairman Liu Mingkang said China will open up itsbanking sector on schedule next year. [AFP]

Liu Mingkang, head of the China Banking Regulatory Commission (CBRC), said China would keep its promise to open up its banking sector to foreign competition by December 2006.

The commitment was made as part of China's 2001 accession to the World Trade Organization (WTO).

"Since our nation entered the transition period following WTO accession, the banking sector has all along been awaiting the new period of fully opening," Liu told reporters during a briefing on the banking industry.

"With the grace period provided by China's WTO agreement approaching the end, the CBRC has, with the fostering of a strategic global vision, been actively pushing forward the opening up of the Chinese banking sector."

Liu said the state would end capital injections into ailing banks, a practice once used to ready them for initial public offerings and make them more attractive to foreign investors.

"The government will no longer pay for the losses made by commercial banks."

Liu said China's banking reforms were aimed at making the sector commercially competitive while freeing huge state-run banks from overbearing policy constraints that have resulted in a mountain of non-performing loans.