Business News

Chinese premier calls for break-up of banking monopoly

By Andreas Landwehr Apr 4, 2012, 12:52 GMT

Beijing - Chinese Prime Minister Wen Jiabao on Wednesday called for a fundamental reform of the country's financial sector, including the break-up of the monopoly of state banks, a news report said.

'Our banks are making a profit too easily,' he told a conference of local businesses in the southern province of Fujian, according to a report on the website of China National Radio.

'Why? Because a small number of large banks have a monopoly, which means that you can only go to those banks if you want credit or capital,' he said.

Banks should also be made accessible to private investors, he said. 'That means, that we must break the monopoly.'

China's economic growth has slowed to its lowest pace in three years, leading to concern over its businesses' access to finance.

Wen cited a pilot project in Wenzhou, in Zhejiang province, saying it could be rolled out elsewhere in the country.

Although Wen explicitly stressed that the central committee of the Communist party backed the idea, it was significant that his comments were not reported in all state media.

That could be because Wednesday was a national holiday in China, although one newspaper, Beijing's Xingjingbao, commented that state-run banks were in a healthy enough state to tolerate some risks.

It is another in a series of calls for steps toward reform by Wen, who is set to step down from his position later this year.

The policy could be seen through the prism of the current apparent power struggle within party leadership, following the removal on March 15 of Chongqing regional Communist Party leader Bo Xilai, who was previously seen as a rising star.

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