Regulators are to ask foreign banks to incorporate their China operations locally in a move that could see them face higher capitalization requirements and higher taxes, the Wall Street Journal reported. They may also have to make accounting and management changes under the new rules, which the China Banking Regulatory Commission has said are necessary to improve regulation and control risk. China's banking sector is due to open up considerably in December according to WTO accession agreements, with all foreign banks permitted to accept deposits and give loans in local currency. The CBRC's planned changes are intended to level the playing field between foreign and domestic players by making them structurally more similar.
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