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China's Wen Calls For Break-Up Of Banking Monopoly

China's Wen Calls For Break-Up Of Banking Monopoly

Chinese Premier Wen Jiabao urged state-owned banks to end their "monopoly" in lending, to allow freer flow of capital to the country's private sector.

The country's state-owned banks are making money "too easily," he said in comments posted on the website of China National Radio on Wednesday.

Because of a few big lenders' monopoly, one can only go to them for loans, the media reported Wen as saying. Thus it is hard for businesses to raise necessary capital and the government is working on getting private capital into the finance sector. "We have to break up their monopoly," he said.

Wen's comments largely reflected government efforts to open up the capital markets and boost foreign investment. China is looking to boost investment in the financial sector amid softening economic growth.

The government targets 7.5 percent growth for the economy this year, as it plans to shift to a more consumption-led growth. National Development and Reform Commission Vice Chairman Zhang Xiaoqiang said Tuesday that the economy may have expanded 8.4 percent in the first quarter of 2012. Meanwhile, China on Tuesday almost tripled the amount of money that foreign fund managers can invest in the country's capital markets. The China Securities Regulatory Commission said that it is increasing the quotas for foreign institutions to $80 billion from $30 billion.

The move was part of an expansion of the qualified foreign institutional investor, or QFII, scheme. The government also lifted the amount of local currency that the offshore investors can raise for investment in China to CNY 70 billion from CNY 20 billion.

by RTT Staff Writer

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