Doing Business with China

China's import and export financing after WTO entry

China's entry into the WTO will drive China's import and export financing towards the improvement of financing services, the reduction of financing cost and further opening of the financial market to foreign financial institutions.

The WTO entry has built a more solid stage for Eximbank to exercise its role of policy orientation. The bank will be better able to integrate those successful experiences of foreign export financing institutions with Chinese realities and further deepen its reform and speed up its development. Under these new circumstances, effective measures must be taken at Eximbank to further promote China's foreign trade strategies. While the size of loans will be increased, Eximbank must also improve its lending structure, enhance its capability to weather financial exposures and upgrade the quality of lending . To meet the need for business development the Eximbank will improve its banking facilities and raise the quality level of financial services.

With regard to the treatment to foreign banks China has pledged in the second article of Specific Concession List on Service Trade “ List of Exemptions to Most Favoured Nations under Appendix 9 of the Entry Protocol of the People's Republic of China:

• to remove geographic restrictions on foreign exchange business after entry;

• to phase out geographical restrictions over local currency according to the following timetable:

  • to eliminate all restrictions within five years after entry;

  • to permit foreign financial institutions to provide services in China with no client restrictions;

  • to allow foreign financial institutions to provide services to Chinese enterprises in local currency within two years of entry;

  • to allow foreign financial institutions to provide services to all Chinese clients within five years of entry.

With the opening of financial markets, the service quality in foreign trade financing will be improved through competition, which in turn will benefit both Chinese and foreign companies in their import and export business.