Opening a China Bank Account

Introduction to Chinese Banking

The history of banking in China

An Introduction to the current banking system and what institution could be called a “bank” in China. The history of banking in China is not as long as that in the UK. The first bank in mainland China was established by English in 1845 and the first bank run by Chinese was opened in 1897.

The banking system in China used to develop with the economic system of the country. The People’s Bank of China (“PBC”) used to function as both the central bank and the commercial bank during the planned economic system and since the implementation of the reform and opening-up policy (since then the economic system changed to a market one), the PBC turned to focus especially on the function of the central bank, which is to “formulate and implement monetary policies, guard against and eliminate financial risks, and maintain financial stability.”

Opening a China Bank Account

The current banking system in China includes the central bank, banking financial institutions, non-banking financial institutions and regulatory bodies.

Banking financial institutions mainly include commercial banks, policy banks, savings banks and foreign banks. As have mentioned, the PBC acts as the central bank and only those institutions examined and approved by the banking regulatory could be classified as commercial banks. Policy banks, also known as non-commercial banks are established by Chinese government whose objective is to implement the economic policy and does not aim to gain profit.

We may find that unlike in some common law countries’ definition of “bank”, in China, only those institutions that are established by the government and those examined and approved by the banking regulatory could be called “bank”, all other institutions, even though carry out banking business, are not “banks”.

To be precise, only the central bank and banking financial institutions could use the “bank” in their names. The investment bank belongs to non-banking financial institution and thus except for foreign investment banks, other such institutions, wholly domestic-funded or joint-venture, are not permitted to use “bank” in their name can be used in opening a China Bank Account