China's banking regulator will allow foreign banks to conduct yuan trading upon establishing operations in China, a move that is part of the country's efforts to open up the financial sector, the South China Morning Post reported Dec. 13.
The China Banking Regulatory Commission, or CBRC, said in a statement on its website that it will scrap the eligibility requirement that requires foreign banks to be operating in the country for one year before conducting yuan trading.
The regulator will also support foreign banks looking to conduct government bond trading. However, the CBRC did not give a timetable for the changes, only noting that the revision will involve amending rules and regulations.
The CBRC also promised to relax rules on yuan-denominated personal deposits for foreign banks without a local subsidiary. Such banks can currently only take in term deposits of more than 1 million yuan from Chinese clients.
China has moved to open up its financial markets in recent years. In November, the government said it would lift foreign ownership caps for financial companies and will allow foreign investors to hold up to a 51% stake in securities ventures and life insurance companies, up from the current limit of 49%.
As of Dec. 13, US$1 was equivalent to 6.62 Chinese yuan.
