The People's Bank of China (PBC) declared in its Announcement No.26 [2002] that foreign financial institutions would be allowed to do Renminbi business in Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan from December 1, 2002.
In accordance with the Announcement, starting from December 1, 2002, foreign financial institutions in these five cities may apply to the PBC for Renminbi business license in line with provisions of Regulations of the People's Republic of China on Administration of the Foreign-funded Financial Institutions (Decree No.340 of the State Council of the People's Republic of China) and the Implementation Rules of the above Regulations (Decree No.1 [2002] of the People's Bank of China). This is another step forward in fulfilling China's WTO commitment.
The spokesman of the PBC said that the customers' restriction on foreign exchange business was abolished and Renminbi business opened for foreign banks in Shanghai, Shenzhen, Tianjin and Dalian when China officially joined the WTO on December 11, 2001. He further pointed out that opening up of the banking sector gradually as committed by China in WTO accession would improve the capital structure of the domestic banks, boost capital inflow and introduce into China advanced experience in banking supervision and operation, which could further help to standardize domestic financial market development and improve banking service and competitiveness of the Chinese banks in the international market.
PBC statistics showed that, by the end of last September, foreign banks had 181 operations offices in China, of which 45 had gained permission to do Renminbi business. Those foreign banks had RMB47.797 billion yuan in assets, of which 38.5 billion yuan were loans.
