China's announcement yesterday that foreign banks can soon deal in renminbi retail business has prompted a flurry of international lenders to announce their plans to incorporate in China.

The rule, which marks the implementation of one of China's banking commitments to the World Trade Organization (WTO), allows foreign-funded banks to deal in the renminbi retail business across the country after December 11.

In order to better protect the interests of domestic depositors, the Chinese Government is encouraging foreign banks to incorporate locally when dealing in renminbi retail business.

The release of the rule yesterday was welcomed by foreign banks, with a few immediately announcing they are ready to become among the first to incorporate in China.

According to Xu Feng, the director in charge of overseeing foreign banks for the China Banking Regulatory Commission (CBRC), more than 10 foreign banks are ready to change their branches to local corporations following the issuance of the rules.

Foreign lenders including HSBC, Standard Chartered, Bank of East Asia, and Hang Seng Bank have all expressed their willingness to transfer operating branches into locally registered corporations.

"It is a historic milestone to mark the fifth anniversary of China's entry into the WTO and its commitment to fully open the financial market," said Richard Yorke, China CEO of HSBC.

"We believe that local incorporation will enable us to further expand our network and service range, in particular our renminbi financing ability for the benefit of our customers in the China market," he said.

HSBC, Europe's largest bank, is aimed to become one of the first to incorporate in China based on its experience in other countries.

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