Beijing (AsiaNews/Agencies) - The Chinese government announced today that it would allow the creation of up to five private banks in 2014.
The move aims to open up the financial sector and improve competition in industry, both blocked by a credit system entirely in the hands of the state.
Private finance will be able to either restructure existing banks or set up new ones "bearing their own risks".
The China Banking Regulatory Commission (CBRC) made the announcement today.
According to Xinhua, the government will allow the creation of "three to five" private banks, a step "that could then be extended" to open up the industry to both domestic and foreign capital "as much as possible."
Strict procedures and standards will be set for the pilots, with demanding set-up criteria, limited licenses, enhanced supervision and a risk handling system.
Last September, China launched a free-trade zone in Shanghai where controls on key sectors will be eased.
Measures to be tried inside the zone include looser controls on the yuan.