China says eight foreign banks have applied for retail banking licenses in a country estimated to have up to $4 trillion in domestic savings. From Beijing, Roger Wilkison reports the announcement was made just as a World Trade Organization deadline came due for China to open up its banking market to outsiders.
The foreign institutions applying for retail banking licenses in local currency in China come from the United States, Japan, Britain, the Netherlands, Singapore and Hong Kong.
Several dozen foreign banks operate in China. They are mostly limited to dealing in foreign currency and are not expected to grab a big market share in the booming retail banking sector. Industry analysts say they think the foreign banks will concentrate on high-end, mainly corporate, business.
At least one Beijing woman who asked that she not be identified says she is happy with a more open financial market.
"Now we have more choices for loans," she said. "And now we can purchase financial management products from foreign banks. We can see which bank's service is better."
Most foreign banks are buying stakes in joint ventures with Chinese partners instead of trying to enter the local market alone. Chinese banks, too, are modernizing their services so as to better compete with the foreigners.
Five years after joining the WTO, China is proud of its efforts to comply with its rules.
China's representative to the WTO, Sun Zhenyu, says his country's compliance efforts have been recognized. Sun says that, during this year's discussion in Geneva of China's WTO status, nearly all his fellow representatives rated China's trade policy highly.
Not everyone agrees. U.S. Trade Representative Susan Schwab, writing in Monday's edition of the British newspaper, the Financial Times, complains about poor Chinese protection of patents and copyrights and rampant piracy of U.S. films, music and software. She says China is limiting imports and shielding domestic companies from competition.
Schwab will be a member of a high-powered U.S. delegation led by Treasury Secretary Henry Paulson that will meet later this week with Chinese economic policymakers.
Paulson is urging China to allow its currency, the yuan, to rise faster against the U.S. dollar. He wants China to do more to reduce its fast-growing trade surplus with the United States, which totaled more than $156 billion in the first 11 months of this year.