"We still have controls on the capital account. I cannot say there are no speculative funds. But the amount entering China is not large," says Zhou Xiaochuan, Governor of the People's Bank of China. (Xinhua)

The public listings of Bank of China (BOC) and China Construction Bank (CCB) are "not far off," China's central bank chief said yesterday.

Zhou Xiaochuan, governor of the People's Bank of China the central bank said the two banks had completed financial restructuring, and were strengthening corporate governance and implementing internal reforms.

"I would say they are not very far away from being listed," he told a press conference at the ongoing National People's Congress.

He said the final decisions on the listings will be made by the banks' boards, which will consider factors such as the stock market situation. "They will also listen to opinions of investment banks, financial consultant companies and accounting firms in deciding the timing and venue for the listings," Zhou said.

China is strengthening the four major State banks BOC, CCB, Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC) to prepare them for a "full opening-up" of the banking sector by the end of 2006.

The listings are in accordance with Beijing's commitments to the World Trade Organization.

The central bank is a key institution in formulating bank reform.

The central government injected US$45 billion in late 2003 to boost the balance sheets of BOC and CCB after aggressive bad-debt write-offs .

Media reports have quoted informed sources as saying ICBC is likely to receive a US$50-billion capital infusion but financial officials have refused to confirm the cash injection.

However, Zhou reiterated that reforms at ICBC and ABC must be pushed forward.

"They will be based on the progress BOC and CCB make in their reforms and their experience," he said.

Asked about China's forex system, Zhou dismissed the impact of speculative funds on the renminbi.

"We still have controls on the capital account. I cannot say there are no speculative funds. But the amount entering China is not large."

China's foreign exchange reserves have been surging since 2002. Many financial experts claim an important reason behind the growth is international speculative funds sneaking into China and betting on the appreciation of the yuan.

Asked to confirm reports that the central bank is planning to set up a mega branch in Shanghai, Zhou replied: "Shanghai has a special position in China's financial sector.

"It is the central zone for many financial markets and it provides many types of financial services nationwide...So the People's Bank of China's idea is that our team in Shanghai should help the national financial markets there perform their functions better."

(China Daily)

write-off:(accounting) reduction in the book value of an asset（銷帳，勾銷）