China mulling 14 deals to link Chinese, foreign banks

[HenryTo]

This is definitely an unprecedented move by any sovereign government or country that I have ever witnessed. Any comments? Pete?
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China mulling 14 deals to link Chinese, foreign banks

BEIJING (AFP) - A senior bank official says more than 14 potential deals to link Chinese and foreign banks are under discussion, a move that could lead to every Chinese bank having an overseas partner.

Zhu Min, assistant to the president at the state-controlled Bank of China, noted that three of the big four state-owned banks have already lined up foreign strategic partners and said more deals were expected.

"There are still more than 14 in the pipeline," he said at a seminar at the EU-China Business Summit.

Zhu did not identify the banks in the talks but said that most of the so-called shareholding banks, or those that have reorganised from direct state ownership, were anxiously looking for foreign partners.

"In three to four years' time, every Chinese bank will have a foreign bank as partner," he told the seminar.

Among the deals that have been announced so far, Bank of America and Singapore government-linked Temasek Holdings have taken stakes in state-controlled China Construction Bank.

Temasek and a group led by Royal Bank of Scotland have also taken shares in the Bank of China.

The Industrial and Commercial Bank of China is also said to be close to a deal that could bring in Goldman Sachs, Allianz Group and American Express as partners while Bank of Communications has HSBC Holdings as a strategic partner.

The Chinese government is keen to ensure the banks attract funds and make them more competitive before the financial sector opens the same lending services to foreign competition at the end of 2006.

For their part, foreign lenders are eager to tap China's pool of 1.6 trillion dollars in household savings.

Regulators also hope that pushing the state banks to go public and to bring foreign strategic investors on board will bring greater transparency to the scandal-hit sector.