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Four foreign banks Chinese law engage in trade in RMB in China

Citibank, HSBC, Standard Chartered Bank and Bank of East Asia, have started their retail RMB Monday after being approved by the State Commission for Regulation Banking.

Richard Stanley, president and CEO of Citibank China, said that the launch of retail services was an important moment in developing long-term operations in China, and that the company would provide its best services to approximately 1.3 billion people in the country.

Catherine Fok, head of financial services to individuals at HSBC China, said it was an important step in opening China’s financial markets and the company would leverage its extensive experience of Working with international clients to meet the financial needs of local Chinese residents.

Previously, foreign banks were allowed to offer services as foreign exchange to individuals from mainland China, although they were allowed to provide services to both foreign currency and local currency business .

China fully opened its banking sector to foreign banks last December in accordance with its commitments upon accession to the World Trade Organization. But the country’s laws stipulate that foreign banks must open a branch of Chinese law before they can conduct retail RMB.

The four foreign banks are the first to have established subsidiaries of Chinese law on the mainland of China. The retail trade includes mainly deposits, loans and insurance products yuan.

The launch of these services means more competition for domestic banks from foreign competitors, analysts said. But foreign banks are not ordinary Chinese targeted. Citibank requires including an initial deposit of 80 000 yuan (10 U.S. $ 360). According

Guo Tianyong, director of the Center for State banking research at the Central University of Economics and Finance, Chinese banks are still ahead in the near future but should follow the example of foreign banks in terms of quality products, services, risk management and organizational structure to improve their own competitiveness.

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