Foreign banks had maintained annual growth of more than 30 per cent in China, the China Banking Regulatory Commission said in a statement announcing new cities they could operate in.

"Foreign banks have become an indispensable force in China's banking system," it said.

As required under commitments that Beijing made when it joined the World Trade Organisation in 2001, the cities of Shantou and Ningbo were now open to foreign banks offering yuan business to Chinese and foreign companies and to foreign individuals, the commission said.

And it added a further five cities that it said it did not yet need to open up: Harbin, Changchun, Lanzhou, Yinchuan, Nanning.

Foreign banks are already allowed to offer foreign-currency business anywhere in China.

From next December, they will be allowed to offer yuan business to anyone anywhere in China, subject to regulatory approval.

The gradual introduction of foreign banks is ratcheting up competition for China's domestic banks, whose operations the government is keen to sharpen.

The commission said that at the end of October foreign banks had had total assets in China of US$84,5 billion (N$580,4 billion), about two per cent of all banking assets in China.

Foreign currency loans by foreign banks had been 25 per cent of all foreign currency loans.

- Nampa-Reuters

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