According to the announcement, foreign financial institutions in these cities can apply to the central bank to conduct Renminbi business starting from December 1.

A spokesman for the PBOC said this move followed China's promises related to its accession to the World Trade Organization. When China officially joined the WTO on December 11, 2001, it removed restrictions on the foreign exchange clients of foreign banks and allowed them to conduct RMB business in Shanghai, Shenzhen, Tianjin and Dalian.

He said in the years ahead the market would gradually open, which would prove beneficial in improving China's banking capital structure, increasing the inflow of international capital, and introducing modern banking management theories.

According to statistics from the central bank, by the end of September this year, there were 181 foreign financial institutions in China, of which 45 had been given the green light over RMB. The total assets of foreign banks were valued at 47.797 billion yuan (about US$5.78 billion), with an aggregate loan of 38.5 billion yuan.

(Xinhua News Agency November 20, 2002)