(August 31, 2007) The “2007 Report on Competitiveness of China’s Commercial Banks” was published on August 25 by the Chinese Banker Magazine. According to the report, listed banks excelled in their competitiveness over their peers. China Merchants Bank (“CMB”) was ranked first in its financial strength and core competitiveness. CMB was also named the best commercial bank.

It is the third report issued by the Chinese Banker Magazine on competitiveness of China’s commercial banks. Dr Wang Songqi, editor-in-chief of the Chinese Banker Magazine and head of the research program on the rankings on competitiveness of China’s commercial banks, remarked that the overall competitiveness of the banking sector had been raised steadily. Yet challenges still lied ahead. On the one hand, quite a number of banks were unable to meet the standard financial requirements, in particular city commercial banks. On the other hand, although the general financial positions of the sector were improved, its core competitiveness had to be further strengthened, for example, in the areas of strategic planning, corporate governance and business process reengineering.

According to Mr. Wang Jun, Senior Financial Management Specialist of the World Bank, called for attention paid to the issues of over-regulation and under-regulation of the banking sector. He urged the regulatory authorities should loosen control of the sector, and the local government in particular should unleash its grip on local banks and branches. To loosen control did not necessarily mean poorer supervision.