Fitch's Wu Says China Committed to Financial Reform

The transcript discusses China's public commitment to financial sector reform, coinciding with a US presidential visit. Despite legislative progress, foreign banks face challenges due to ownership restrictions and market conditions. The removal of the loan-to-deposit ratio offers some relief, but the banking sector's slow growth and asset quality issues limit foreign interest. Investment in Chinese banks remains significant but risky, with limited opportunities for foreign banks.

What is the current share of foreign banks in China's banking sector?

• Exactly 5%

• More than 20%

• About 10%

• Less than 2%

What major restriction on foreign bank expansion in China was recently removed?

• Branch limitation

• Capital requirement

• 75% loan-to-deposit ratio

• Ownership restriction

What is one of the challenges currently faced by China's banking system?

• Increasing foreign interest

• Deteriorating asset quality

• High profit margins

• Rapid growth

Why might foreign banks be hesitant to invest in Chinese banks?

• High profitability

• Strong risk management

• Financial distress and risk management issues

• Low investment requirements

What is a significant factor for foreign banks considering investment in Chinese banks?

• Significant dollar investment

• High growth potential

• Low dollar investment

• No ownership restrictions