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State Banks Open to Private Investors
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The door of state-owned commercial banks is open to private investors, a Chinese banking official has said, refuting claims that state-owned banks exclude private funds when bringing in strategic investment.

 

Capital admittance of state-owned banks has never restricted the entry of private funds and private investors can hold part of the shares of state-owned banks, said Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CBRC).

 

Currently, some private investors are holding and even buying into a large part of shares of some commercial banks, Tang told a financial experts forum in Beijing.

 

As China's state-owned commercial banks, including the China Construction Bank, the Industrial and Commercial Bank of China, and Bank of China, have finished the introduction of strategic investment, there are claims that state-owned banks' strategic investors are excluding private investors.

 

Responding to this view, Tang said, capital access should be distinguished from institution access when talking about bringing in strategic investors.

 

Strategic investors in the China Construction Bank all come from foreign countries, while those investors in the Bank of China and the Industrial and Commercial Bank of China will include both foreign ones and domestic institutional investors, Tang was quoted as saying by Monday's daily newspaper Beijing Times.

 

However, Tang stressed two principles for the banking institutions' market access: they should not be engaged in related business and obtain loans through illegal means; they should separate the ownership from the business operation; the operators and managers should be experts in the banking business.

 

Tang also refuted the saying that bringing in foreign strategic investors would threaten the country's financial security, saying an increase in non-performing funds was the major factor threatening financial security.

 

In carrying out reform of state-owned banks, China has adhered to the principle that the country holds the majority stake, which could fully guarantee financial security, Tang said.

 

At the same time, commercial banks that have introduced foreign strategic investors have taken a series of measures to protect state secrets and business secrets, and all the measures are expected to guarantee the country's financial security, Tang said.

 

(Xinhua News Agency March 21, 2006)

 

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