The People’s Bank of China has drawn up a timetable for the lifting of geographic restrictions on foreign bank branches after China joins the World Trade Organisation, People’s Daily said. Upon accession, foreign banks will be allowed to operate in Shenzhen, Shanghai, Dalian and Tianjin. Thereafter, year by year, the number of cities will be increased until five years after entry, all geographic restrictions will be eliminated. Generally, the opening will shift from the coast to inland and from larger to smaller centres, although the special economic zones of Zhuhai and Xiamen will not be opened until three years after China’s accession, the same year that Beijing is opened, and Shantou not until the fourth year.
Foreign banks will still have to obtain licences before starting operations in new cities, though they will be allowed to open new branches in cities where they are already licensed.
A subsequent report in the online edition of People’s Daily said that the central bank would ‘appropriately limit’ the amount of overseas borrowings by foreign banks to be used for lending in China. Wu Xiaoling, a deputy governor of the Bank, was quoted as saying that foreign banks must actively attract deposits from China-based clients to fund their lending activities.