. /.  RESTRICTED  WORLD TRADE  
ORGANIZATION  S/FIN/W/55 
16 November 2006 
 (06-5538) 
Committee on Trade in Financial Services Original:   English 
  
 
COMMUNICATION FROM AUSTRALIA 
 
Transitional Review Mechanism Pursuant to Paragraph 18 of the Protocol of 
 
Accession of the People's Republic of China ("China")  
 
 
 The following communication, dated 15 Novemb er 2006, from the delegation of Australia is 
being circulated to the Members of the Committee on Trade in Financial Services. 
 
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Questions from Australia to China 
concerning Financial Services 
 
1. Australia welcomes China's efforts to increase re gulatory transparency in its financial services 
sectors.  The competitive stimulus and enhanced effi ciency engendered in the financial sector is an 
important source of economic growth in the sector and the economy as a whole.  Australia recognises 
the importance of the transitional review mechan ism in clarifying and assisting in the effective 
implementation of China's WTO accession commitments.   In this context, Australia has questions 
concerning banking and insurances services.  
I. INSURANCE SERVICES 
2. Article 8 of the China Insurance Regulatory Commission's Interim Regulations for Insurance 
Assets Management Companies  of 1 June 2004 requires that only insu rers that have held licenses for 
more than eight years are permitted to establish an insurance asset management  company.  Does this 
requirement apply only to insurers that have been licensed in China  for eight years?  If so, does China 
plan to ameliorate the disproportionate impact of this limitation on foreign insurers in light of its 
national treatment obligations on insurance in its  Schedule of Specific Commitments on Services? 
3. Would China please clarify what (if any) re gulatory measures that the China Insurance 
Regulatory Commission has implemented to give  effect to China's commitments on health 
insurance/group insurance and pension/annuities insu rance and indicate how many foreign or foreign 
invested companies have applied and b een approved to conduct such activities? 
II. BANKING SERVICES 
4. Australia understands that China proposes to  introduce new banking regulations affecting 
foreign banks by the end of 2006.  In accord ance with China's commitment in Part 1 – 
Section 2 (c) (1) of its Protocol of Accession, Ch ina agreed to make available to WTO Members, 
upon request, all laws, regulations and other measur es pertaining to or affecting trade in goods, 
services, TRIPS or the control of foreign exchange before such measures were implemented or 
enforced.  Accordingly, Australia would appreciate China providing a copy of the draft regulations as 
soon as possible prior to implementation of the new regulations.  S/FIN/W/55 
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  5. Australia understands that, among other things, the new foreign banking regulations will 
require foreign banks to establish a local subsid iary to undertake retail RMB business on the same 
basis that such banks are currently authorised to  undertake such business through branch operations.  
In light of China's WTO commitment that within five  years of accession, foreign financial institutions 
would be able to provide local currency business to  all Chinese clients and given that China did not 
inscribe limitations on forms of establishment/ operation in its Schedule of Specific Commitments, 
would China please clarify how the proposed requ irement under the draft banking regulations, if 
correct, sits with its WTO commitments? 
6. Please clarify whether the new foreign banking regulations will restrict appropriately 
authorised foreign bank branches to accepting de posits greater than RMB 1 million per transaction 
and, if so, explain the rationale for such restricti ons in light of China's deposit structure and existing 
WTO commitments.   
7. Please clarify what other differences in busin ess scope will apply as regards foreign branches 
and foreign bank subsidiaries following implementa tion of the new foreign banking regulations and 
explain the basis for such differences in light of China's WTO commitments. 
8. Please clarify whether the new foreign banking regulations will require foreign banks that 
convert existing bank branches authorised to con duct RMB business to meet fresh operating history 
and profitability requirements befo re again being authorised to conduct RMB business.  If so, on what 
basis does China regard this as necessary? 
9. In light of China's commitments on paymen ts and money transmission services including 
credit, charge and debit cards, please clarify the steps China is taking to ensure that these 
commitments will come into effect with respect to RMB business of retail clients within five years of 
accession.  In particular, Australia would like to know what measures will apply to the issuance of 
credit or payment cards by foreign financia l institutions for domestic transactions. 
10. Australia would appreciate information on what measures China is taking to eliminate non-
prudential measures as criterion for authorising compani es to deal in China's financial services sector, 
as China committed to doing within five years af ter accession, in its GATS Schedule of Specific 
Commitments. 
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