The establishment of an overseas Chinese bank in the financial hub of the country will not become a reality quickly, despite heated discussion about the proposal amongst local supporters.

The plan, which was first raised by senior officials with the Shanghai Overseas Chinese Chamber of Commerce (SOCCC) in a recent conference, has not been filed to the local regulatory authorities for approval.

"We still need to sit down together and work out a much more detailed plan for further consultations," said Zhang Zhaofeng, secretary-general of SOCCC, a club of big overseas Chinese entrepreneurs founded in late 2003.

But most members of the chamber support the plan and hope quick progress could be made, according to Zhang, who is also a senior official with the Overseas Chinese Affairs Office (OCAO) of Shanghai Municipal Government.

Reform of China's State-owned commercial banks remains a prime concern for regulatory bodies, but establishment of a new commercial bank still looks attractive for Shanghai, a city that is striving to turn itself into a regional financial center in Asia.

Zhang said that the planned bank could be a shareholding bank launched by enterprises represented by the members of the chamber, with more investments from other sectors, including from overseas.

"One of the choices (for the launch capital) will be investments from the enterprises of those member entrepreneurs," said Zhang.

According to the SOCCC, members of the chamber are all high-profile figures from leading enterprises, and some of them are bankers.

"Some of our members are experienced bankers, which could help us speed up the development process and streamline the preparatory process," said Zhang in a telephone interview with China Daily last week.

If everything goes smoothly, the launch would make the bank the 14th shareholding bank with national coverage in China, following the impending launch of Bohai Bank, a commercial bank that has already been given the green-light to open in Tianjin, an industrial base and a port city in North China.

The Bohai Bank, to be launched by several partners, including the TEDA group, a local big name, and Standard Chartered Bank, will become the country's 13th shareholding with national coverage and is expected to be established in Tianjin in the near future.

But it seems that the regulatory authorities remain cool to the SOCCC proposal.

"We have not received any reports from the chamber, nor the local Overseas Affairs Office," said Zhang Rongfang, spokesman of the Shanghai Bureau of China Banking Regulatory Commission, the watchdog of the financial sector in Shanghai.

"Establishment of a new bank is not that simple, .....it could take a long time before the green-light is finally given," said Zhang.

Although Shanghai today is only home to the Bank of Communications - China's fifth largest commercial bank, many commercial banks, including the Big Four, have shifted their most important departments to the city. More importantly, most foreign banks, such as Citibank and the Hongkong and Shanghai Banking Corp, have established their Chinese headquarters in Shanghai.

Zhang Zhaofeng said that one of the major objectives for the founding of the bank is to foster the growth of firms founded by overseas Chinese in China through the more efficient use of their funds.

"It will take time, but we will take measures to accelerate the process," said Zhou Hong, director of OCAD's economic department.

(China Daily April 25, 2005)