Chinese and foreign banks are girding up for competition as China opened its financial sector to foreign banks on Monday, which also marked the fifth anniversary of the nation's entry into the World Trade Organization (WTO).

The Bank of Beijing announced Monday that it was offering financial services specifically aimed at individuals and firms from the Republic of Korea (ROK).

The services including China-ROK express remittances, bank accounts for ROK students studying in China, automatic agency payments and money management consultations, according to the bank.

Under the country's Regulations on the Administration of Foreign-funded Banks, which took effect on Monday, foreign-funded banks in China will soon be allowed to offer Renminbi business services to Chinese customers.

The China Banking Regulatory Commission (CBRC), the country's banking regulator, said that it received local incorporation applications from eight foreign banks, including the Hongkong and Shanghai Banking Corporation Limited (HSBC), Citigroup and Standard Chartered Bank (SCB).

"We think local registration will have a positive influence on the long-term development of China's financial market. It will help us further expand the scope of our services, especially our capability to offer our clients Renminbi financing," said Vincent Cheng, chairman of the HSBC.

The HSBC set up a new branch last Tuesday in Guangzhou, capital of south China's Guangdong Province, to provide services specifically for industrial and commercial enterprises in south China.

The SCB signed last Thursday a memorandum of cooperation with Tianjin Economic-Technological Development Area to set up its China business operation center in the area.

The center, which is expected to open next year, will have a national customer service center in support of the bank's Renminbi business, according to the SCB.

"Chinese and foreign banks will both cooperate and compete, which will improve services across the board," said Mu Shi, head of Shanghai Pudong Development Bank Tianjin Branch.

"The introduction of competition and strategic investors will help improve innovation, management and profitability among domestic banks," said Wang Zhaoxing, assistant to the chairman of the CBRC.

Three of China's leading four state-owned commercial banks -- the Bank of China, China Construction Bank and the Industrial and Commercial Bank of China -- have listed overseas. Their share offerings were over-subscribed, signaling confidence in the development of China's banking industry.

(Xinhua News Agency December 12, 2006)