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China may raise cap on foreign investment
(AP)
Updated: 2005-09-14 17:10
China's banking regulator is considering raising the limits on foreign stakes
in state-run commercial banks, a change that potentially could bring billions of
dollars in new investments into the industry, an official said Wednesday.
Pedestrians walk
past sign boards of foreign banks in the Lujiazui financial area in
Shanghai's Pudong new area in this April 23, 2005 photo. China is
considering raising the limits on foreign stakes in state-run commercial
banks. [newsphoto] | However, Fu Weiyi, spokesman for the China Banking Regulatory Commission,
sought to downplay a report on the issue, stressing that the agency was only
considering adjusting the limits. Those cap an equity stake in a Chinese bank by
any one foreign institution at 20 percent, with the total foreign holdings
limited to a maximum of 25 percent.
"The CBRC has not yet issued any official announcements and we don't have any
concrete plan for that. This is just an idea," Fu said.
Foreign banks, including Royal Bank of Scotland Group PLC and Goldman Sachs
Group. Inc., have been staking out strategic alliances in China, hoping to be
well-positioned for the eventual full opening of the banking industry to foreign
competition in late 2006. Chinese banks are being encouraged to seek such
partnerships to help build up their capital and improve management.
The limits on foreign investments apparently are aimed at
preserving state control of major lenders, which are still all state-owned.
However, some foreign investors have chafed at those limits, saying they prevent
investors from exerting enough influence to improve bank management.
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