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Concerning the banking sector, China has made the following commitments:
1. On the issue of cross-border supplies, foreign-owned companies can make provisions and transfer financial information, financial data processing and related software via other financial service suppliers;
Advisory, intermediation and other auxiliary financial services on all activities include credit referencing and analysis, investment and portfolio research and advice, advice on acquisitions and corporate restructuring and strategies.
2. Restrictions on establishing foreign-owned banks in China
--Geographic coverage
For the foreign currency business, there will be no geographic restriction upon accession.
For the local currency business, the geographic restrictions will be phased out as follows: Upon the World Trade Organization (WTO) accession, Shanghai, Shenzhen, Tianjin and Dalian; within one year of accession, Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan; within two years of accession, Jinan, Fuzhou, Chengdu and Chongqing; within three years of accession, Kunming, Beijing and Xiamen; within four years of accession, Shantou, Ningbo, Shenyang and Xi'an. Within five years of accession, all geographic restrictions will be removed.
--Clients
For the foreign currency business, foreign financial institutions will be permitted to provide services in China without restrictions to clients upon accession.
For the local currency business, within two years of accession, foreign financial institutions will be permitted to provide services to Chinese enterprises. Within five years of accession, foreign financial institutions will be permitted to provide services to all Chinese clients. Foreign financial institutions licensed for the local currency business in one region in China may serve clients in any other region opened for such business.
-- Licensing
Criteria used for authorization to deal in China's financial services sector are solely prudential (i.e., contain no economic needs tests or quantitative limits on licenses). Within five years of accession, any existing non-prudential measures restricting ownership, operation and juridical forms of foreign financial institutions, including internal branching and licenses, will be eliminated.
Foreign financial institutions that meet the following conditions will be permitted to establish a subsidiary of a foreign bank or foreign finance company in China:
-- Total assets of more than US$10 billion at the end of the year prior to filing the application
Foreign financial institutions that meet the following conditions will be permitted to establish a foreign branch in China:
-- Total assets of more than US$20 billion at the end of the year prior to filing the application
Foreign financial institutions that meet the following conditions will be permitted to establish a Chinese-foreign joint bank or Chinese-foreign joint finance company in China:
-- Total assets of more than US$10 billion at the end of the year prior to filing the application
Qualifications for foreign financial institutions to engage in local currency business are as follows:
-- Three years of business operations in China and profitability for two consecutive years prior to the application.
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