On in China is now a scene of heated rivalry by Chinese banks with transnational banking syndicates since China's WTO entry by the end of 2001. Meanwhile, remedial measures are being adopted on the Chinese side.
Transnational banking syndicates are reported to have been run with a massive institutional setup to include 214 agencies, 190 business centers and 158 branch banks with a total asset of US$45.2 billion and a total of over US$14 billion of loans issued in China.
On top of these, 31 transnational banking syndicates have been licensed to go in for Renminbi transactions with a total of 45 billion yuan of asset, of which 39 billion yuan of loans have been issued. Statistics show that an aggregate equivalent of these is about 2 percent of the total assets of Chinese banks and 15 percent of their forex loans.
Though these form no exciting or surprising sight or a strong unshakable force yet as transnational banking syndicates they have come to absorb large sums of money from transnationals.
Transnational banking syndicates, sparing not a glance for small-sum clients, have by themselves brought pressure on host banks according to news reports in China. One is Nanjing Ericsson, after clearing off its loans with Nanjing Communications Bank it has thrown itself into the embrace of Citibank. Qingfeng Printing & Dyeing Company is also one in case. An old customer of Pudong Development Bank as is reported, it has gone over to Hongkong & Shanghai Banking Corporation after leaving merely a token sum of US$1 million with its former Pudong provider.
In short, transnational banking syndicates have begun with their force being felt is manifest. April 24 saw the People's Bank of China issued a circular as part of remedial measures to regulate market access and advance the development of China's banking after WTO entry.
Obsolete rules and methods hampering China's banking are said to be eliminated and with all banking services streamlined and updated a sound institutional setup of banking is to be built to make sure competitive edge be sharpened and great competitive power developed by the country's banking.
(China Daily April 29, 2002)
