U.S. presses China on WTO financial services promises

Reuters News
Posted: Oct 31, 2011 4:50 PM
U.S. presses China on WTO financial services promises

WASHINGTON (Reuters) - The United States criticized China on Monday for failing to implement commitments to open its financial services markets that it made a decade ago in order to join the World Trade Organization.

"While we welcome China's progress in implementing many of its financial services commitments, it appears that China has not implemented, or has only partially implemented, some of them," the U.S. Trade Representative's office said in a statement made at the WTO in Geneva.

The trade office urged China "to take immediate steps to address the concerns ... and further improve foreign companies' access to its financial services sector."

The trade office made the comments as part of a final WTO review of China's progress in implementing the promises it made to join the World Trade Organization in 2001.

The terms of China's accession called for an annual review during the first eight years and a final one in the 10th.

The review is conducted by 16 WTO committees and councils covering different areas of China's commitments.

In a series of statements since September 29, the United States has acknowledged progress made by China in areas ranging from intellectual property rights protection to opening its market to more agricultural goods while pointing out where it has failed to meet important commitments.

That same pattern prevailed in its statement on Monday on China's financial services commitments, which covered areas like banking and insurance.

"Although China has taken a number of steps to implement its banking services commitments, there are some instances in which China still does not seem to have fully implemented particular commitments," the U.S. Trade Representative office said.

"For example, ... China agreed that qualified foreign financial institutions would be permitted to establish Chinese-foreign joint banks immediately after China acceded to the WTO and it did not schedule any limitation on the percentage of foreign ownership in these banks," it said.

"To date, however, China has, in practice, placed limits on the sale of equity stakes in existing Chinese-funded banks to foreign investors. Separately, foreign banks continue to face slow-downs in obtaining regulatory approval to expand their operations in China through the establishment of new internal branches."

(Reporting by Doug Palmer; editing by Bill Trott)