The unsuccessful will be many including in the ranks of the French banks

Great evening hoped by the financiers of the planet did not took place yesterday in China. Expected with excitement by all major Western institutions, opening of the domestic banking sector promised by Beijing, exactly five years ago, when the accession of the countries in the World Trade Organization, will be only very gradually. China is still attached to fulfil to the letter, all its commitments on December 11, 2001. The paper, since yesterday, foreign banks can offer their services in the local currency, the renminbi (commonly called yuan), individual Chinese wherever they are in the country. Until then, the large international banks could work in local currency in 25 cities and only with the companies.

This opening hides a more subtle reality. Fearing a destabilization of their State-owned commercial banks, the authorities have multiplied the prudential rules to prevent any foreign invasion. The new rules laid down by the Banking Regulatory Commission (CBRC) offer and two options for foreigners seeking access to Chinese customers. First, institutions may decide to work as they do today with business through branches depending on their parent. Therefore regarded as completely "foreign", they assign to each new branch a capital of 200 million Yuan, or EUR 20 million. They will then have the right to access to only clients agreeing to submit at least 1 million Yuan (100,000 euros) on their behalf. "That person", it carries a foreign expert, who notes that the rare Chinese with such are benefit already adapted services or accounts in dollars.

Little room for manoeuvre

Making almost impossible access to private customers, these measures will force foreign groups to opt for the system of law Chinese, separate subsidiary, of its parent. To be authorized, the new structure will have to be capitalized at 1 billion yuan (100 million euros). Then, each branch of this subsidiary will have to be equipped with at least 100 million Yuan (10 million euros).

This already demanding regulation, Beijing has added two other constraints. Exposure to the same client may not exceed 10 of the capital of the Bank registered in China. However, unlike ultra-rich local banks, foreign institutions have kept their capital in their countries of origin and therefore have little room for manoeuvre. Primarily active in China, in the business bank, they are all clients of companies exposed to more than 10 and are likely to abandon the retail bank.

"Beijing is not dropped the reins".

Corsant same year, Beijing has planned to prohibit banks to have a "ready on deposit" ratio greater than 75. Billions of dollars of deposits being monopolized by Chinese banks, foreigners will naturally find themselves unable to lend to their customers. "Beijing did not release the reins", summed up the Standard & Poor's analysts in their latest study.

A dozen of major banks such as HSBC, Citigroup, Deutsche Bank and JP Morgan decided yet to start the adventure of the subsidiaries. Entering long administrative procedures, the British Standard Chartered Announces even already 20 branches over the next eighteen months. For others, the majority of the 71 foreign banks in the country, the Chinese savings will remain, for some time at least, inaccessible. Continuing their activities of business bank, they will continue to try to take share in local banks. But, also, opportunities are limited. About 27 foreign banks have already spent $ 20 billion to enter the capital of the great Chinese lenders. These investments are always capped (20 for a same player, 25 of foreigners), few Chinese institutions considered "interesting" were still in the capital to sell. The unsuccessful will be many, including in the ranks of the French banks.