China Approves Private Bank Pilot

March 11, 2014 Share Print 0

China will launch pilot programs testing the development of privately owned banks in Tianjin, Shanghai, Zhejiang and Guangdong, the country’s bank regulator Shang Fulin said on Tuesday.

The pilot, which was approved by China’s government in January, is the first tentative step by the country to open its hitherto closely guarded banking sector to private investors.

An article appearing in the official party mouthpiece People’s Daily on Tuesday named companies that have been approved to participate in the pilot project, including e-commerce giants Alibaba (IPO-ALIB.N) and Tencent (0700.HK) – both of which have been competing to market high-yielding wealth management products online.

A total of 10 companies will participate in the pilot, the report said, adding that five privately owned banks will be approved as the first batch. It did not give names of these banks.

Alibaba is applying for the licence through its affiliated Small and Microfinancial Services Group, which includes online payment unit Alipay as well as its shareholding in Alibaba’s micro-finance unit, Zhongan Insurance, and Tianhong Asset Management Co.

via Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.