One of the greatest challenges China must confront before the WTO treaty enters into force in 2007 is to prepare the country’s banking system for privatization and competition with foreign banks. The government has established a new agency, Central Hujin Investment Company, to manage and re-capitalize big state-owned banks before they are sold. Hujin has already injected $60 billion of China’s foreign-exchange reserves into the Bank of China, the China Construction Bank, and the Industrial and Commercial Bank. The Agricultural Bank will also require new capital, although the government is not yet preparing it for privatization.
One of the greatest challenges China must confront before the WTO treaty enters into force in 2007 is to prepare the country’s banking system for privatization and competition with foreign banks. The government has established a new agency, Central Hujin Investment Company, to manage and re-capitalize big state-owned banks before they are sold. Hujin has already injected $60 billion of China’s foreign-exchange reserves into the Bank of China, the China Construction Bank, and the Industrial and Commercial Bank. The Agricultural Bank will also require new capital, although the government is not yet preparing it for privatization.