China to Let 9 Foreign Banks Incorporate, in Step Toward Retail Business – AP

From AP via International Herald Tribune:

Nine foreign banks took a key step Sunday toward breaking into the Chinese retail banking industry, receiving permission to become the first international lenders to incorporate in China under World Trade Organization market-opening pledges.

The banks’ local units, once incorporated, will be able to take the final step of applying for retail licenses to compete with Chinese banks in handling the local currency, the yuan, the China Banking Regulatory Commission said.

Foreign banks are eager to break into China’s retail market, which has 30 trillion yuan (US$4 trillion; ‚Ǩ3 trillion) in household savings and surging demand for credit cards and other financial services as incomes rise. China’s own banks are racing to modernize in preparation for the influx of competition.[Full Text]