Economy

China Eases Market Access for Foreign Banks

The State Council recently announced the decision to revise regulations on the administration of foreign-funded banks. Its purpose is to cut red tape for foreign bank branch openings and entry into RMB business. The decision came into effect on January 1. It is one of the countrys latest moves to expand opening-up of its financial sector.

When a wholly foreign-funded bank or a Chinese-foreign joint venture bank establishes a branch in China， the branch must receive from its parent bank a non-callable allocation of no less than RMB 100 million （US $16 million）， or an equivalent amount in convertible currencies as its operating capital， according to the previous regulations issued in 2006. The revised regulations have removed that requirement.

Moreover， in the past， a foreign bank was required to have maintained a representative office in China for more than two years before applying to set up its first branch in the country. That restriction has also been removed.

The decision also allows foreign banks to make applications to conduct RMB business after operating for one year in China， as compared to the previous three years. Regulators have also removed the requirement whereby foreign banks must show a profit for two consecutive years prior to their application.

The expanded opening up of the banking sector will optimize the positive role of foreign banks in China， so promoting the financial industry at home and abroad. This will in turn improve efficient allocation of financial resources and further integrate product and management with the world， so upgrading the service and management of Chinas banking industry.

Given their advantages of standard management， low bad loan ratios， and a robust business operation mode， foreign banks will be instrumental in forging good prospects for China as transformation of the countrys economic structure advances， according to Zeng Gang， director of banking research at the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

China Streamlines Procedures for Companies Seeking Funds from Abroad

The China Securities Regulatory Commission （CSRC） recently announced it would streamline administrative procedures for domestic companies seeking overseas listings. Thanks to the new move， such firms now no longer need to provide audit results， according to CSRC spokesperson Zhang Xiaojun. The CSRCs move corresponds with the recently convened State Council executive meeting， which proposed simplifying the approval procedure for domestic firms seeking overseas listings， mergers and acquisitions， so enabling these firms to “go global.”endprint

The regulator approved the application by the Bank of China Ltd. last September to issue overseas preferred shares， and a similar application last November by the Industrial and Commercial Bank of China Ltd. The CSRC also confirmed the application requirements for issuing new common or preferred shares abroad.

Gaining approval for IPOs（Initial Public Offerings） overseas now entails seven rather than 13 application documents， and SPOs（Secondary Public Offerings） overseas necessitate five rather than eight such documents.

Chinas Cross-border E-commerce Service Platform Boosts Trade

The latest data from Chinas General Administration of Customs show that by the end of November 2014， Chinas cross-border e-commerce exports stood at around RMB 700 million， and its crossborder e-commerce imports at around RMB 740 million， due to the countrys cross-border e-commerce service pilot program that started in July 2013.

Certain problems have cropped up. Foreign exchange settlements on express delivery and mailed exports， for example， could not be made， and favorable export rebate policies did not apply to such exports. The newly-established e-commerce platform has effectively solved such anomalies thus upholding consumers rights and interests.

At present， more than 2，000 firms in 30 cities of China have registered to take part in the cross-border ecommerce service pilot program. The customs clearance supervisory system having been connected to shopping websites， the entire process of placing an order， remitting payment， and clearing customs now takes less than five minutes. On July 1， 2014 the unified clearance system for Chinas cross-border e-commerce retail exports formally went online.

Green Vehicle Subsidies to Be Extended to 2020

China will extend subsidies on purchases of new energy“green” vehicles to the year 2020， according to draft rules recently published by the Ministry of Finance， so prolonging the current incentive program that expires at the end of 2015.

The policy represents Chinas latest effort to fight severe pollution and snarling traffic. It is great news for firms such as BYD Co.， Ltd.， the countrys biggest maker of electric vehicles.

Buyers of domestically produced pure-electric， plug-in hybrid electric and fuel-cell vehicles are eligible for subsidies. Subsidy amounts will gradually scale down from 2016 to 2020， according to the draft rules.

Pure-electric car purchasers will initially be entitled to subsidies of up to RMB 55，000 （US$8，834）， while those of pureelectric buses will receive subsidies of up to RMB 500，000.

China has rolled out a series of policies to encourage sales of green vehicles in hopes that the industry can fight pollution and reduce reliance on imported oil.

Production of such vehicles in China jumped five-fold during the first 11 months of last year compared with 2013. But the industry still lags far behind the countrys goal of putting five million new energy vehicles on road by 2020.endprint