China may allow its currency, the renminbi, to become
convertible under a quota system in a newly approved economic zone
in north China's port city of Tianjin.
The initiative, a pilot program that will be conducted with the
help of the country's top foreign exchange regulator, will take
place in Tianjin's Binhai New Area, Shanghai
Securities?Journal reported yesterday, citing Tianjin
Mayor Dai Xianglong.
?
The report did not give details as to when the programme will begin
and what the quota will be.
Large-scale commercial banks in Binhai New Area may also be
allowed to engage in non-banking financial services in the
area.
"In order to sharpen large-scale commercial bank's
competitiveness, conditionally allowing them to branch out into
non-banking financial services is a must," the Shanghai-based
newspaper quoted Dai as saying.
The newspaper made no mention of when that programme would
commence.
Dai, who served as China's central bank governor between 1995
and 2002, also confirmed that the State Council, China's cabinet,
has given the go-ahead for the establishment of a 20 billion yuan
(US$2.5 billion) Bohai Industrial Investment Fund.
This will be the first such fund in the country that invests
directly in companies.
The banker-turned-mayor has made improving his city's financial
industry a top task since assuming the post in 2002.
Two new banks, Binhai Development Bank and the Northeast Asian
Bank, will be allowed to set up in the city to support the
development of Binhai New Area, reports say.
(China Daily June 30, 2006)