China sets up privately owned banks

China has launched a trial program to establish five private banks owned by companies such as Alibaba Group and Tencent Holdings (0700.HKG), Financial Times reported, citing a Tuesday briefing given by the chairman of the China Banking Regulatory Commission, Shang Fulin. The banks, owned by ten companies, would be set up in the cities of Shanghai and Tianjin and in the provinces of Guangdong and Zhejiang. Though subject to the same regulations as China’s large, state-owned lenders, they will be encouraged to focus on lending to small and medium-sized enterprises, in a step toward further liberalization of the financial sector.