China's Banking Law and the National Treatment of Foreign-Funded Banks

324 Pages·2013·2.426 MB·English

by  Wei Wang

China’s Banking Law
and
the nationaL treatment of
foreign-funded Banks
This is a timely, thorough assessment of an important aspect of China’s WTO
obligations. The analysis ranges from national treatment under the Qing to the
2012 US-PRC WTO dispute over China UnionPay, noting not only when unequal
treatment hurts foreign-funded banks vis-à-vis local banks, but also when it helps
them.
Jane k. winn, university of washington school of Law, usa
To my wife
China’s Banking Law
and
the national treatment of
foreign-funded Banks
中国银行法与外资银行国民待遇
wei wang (王伟), Ph.d.
Associate Professor of Fudan University Law School
Shanghai, China
First published 2013 by Ashgate Publishing
Published 2016 by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
711 Third Avenue, New York, NY 10017, USA
Routledge is an imprint of the Taylor & Francis Group, an informa business
Copyright © Wei Wang 2013
Wei Wang has asserted his right under the Copyright, Designs and Patents Act, 1988, to be
identified as the author of this work.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
Notice:
Product or corporate names may be trademarks or registered trademarks, and are used only
for identification and explanation without intent to infringe.
British Library Cataloguing in Publication Data
Wang, Wei.
China’s banking law and the national treatment of foreign-funded banks.
1. Banking law – China. 2. Banks and banking, Foreign – Law and legislation – China.
3. General Agreement on Trade in Services (Organization) 4. World Trade Organization.
I. Title
346.5’1082–dc23
The Library of Congress has cataloged the printed edition as follows:
Wang, Wei, 1970 July–
China’s banking law and the national treatment of foreign-funded banks / by Wei Wang.
pages cm
Includes bibliographical references and index.
ISBN 978-0-7546-7084-1 (hardback)
1. Banks and banking, Foreign—Law and legislation—China. 2. Banks and banking,
International—Law and legislation—China. I. Title.
KNQ942.5.W36 2013
346.51’08215–dc23
2012043462
ISBN 9780754670841 (hbk)
ISBN 9781315571676 (ebk)
Contents
List of Tables vii
List of Abbreviations ix
Foreword by Sir Ross Cranston FBA xi
Foreword by Professor Joseph J. Norton, SJD, DPhil., LLD xiii
Preface xv
Acknowledgments xvii
Introduction 1
Background 1
Why National Treatment? 3
Sources 6
Structure 8
Methodology 10
1 History of National Treatment in China 13
I. Pre-1840 14
II. 1840–1911 15
III. 1912–1949 24
IV. 1949–1978 38
V. Post-1978 43
VI. Concluding Remarks 51
2 WTO National Treatment and China’s Banking Commitments 55
I. Overview of National Treatment under the GATT and the GATS 55
II. China’s WTO National Treatment Commitments 74
III. Changes of GATS/WTO National Treatment in China 87
IV. Concluding Remarks 95
3 Market Access, Forms, and Legal Status of Foreign-Funded Banks
in China 97
I. Market Access of Foreign-Funded Banks 98
II. Forms and Market Access Conditions of Foreign-Funded Banks
in China 111
III. Foreign-Funded Banks in Chinese People’s Courts 120
IV. The Special Legal Status of Hong Kong/Macao/Taiwan Banks in
Mainland China 125
V. Concluding Remarks 134
vi China’s Banking Law and the National Treatment of Foreign-Funded Banks
4 China’s Banking Law Framework: Different Positions of
Foreign-Funded Banks and Chinese-Funded Banks 135
I. Overview of China’s Law Structure 135
II. The Vertical Banking Law Framework of China 139
III. The Horizontal Banking Law Framework of China 154
IV. Shortcomings of China’s Banking Law Framework 167
V. Concluding Remarks 173
5 More Favourable Treatment of Foreign-Funded Banks 175
I. More Favourable Treatment of Foreign-Funded Enterprises 175
II. Trend of Repealing More Favourable Treatment of
Foreign-Funded Banks 178
III. Concluding Remarks 181
6 Less Favourable Treatment of Foreign-Funded Banks 183
I. Less Favourable Treatment of Foreign-Funded Banks 183
II. Less Favourable Treatment of Foreign-Funded Banks Before 2007 189
III. Less Favourable Treatment and China’s WTO Practice in
Banking Services 192
IV. Less Favourable Treatment and Prudential Carve-out 202
V. Concluding Remarks 212
7 Identical Treatment between Foreign-Funded Banks and
Chinese-Funded Banks 215
I. Identical Treatment in the Common Banking Law 215
II. Overlaps between Foreign Banking Law and Domestic
Banking Law 217
III. Identical Treatment and WTO De Facto Discrimination 222
IV. Concluding Remarks 227
8 Integrating China’s Banking Law Framework 229
I. Three Options for Restructuring China’s Banking Law Framework 229
II. Economic Basis of an Integrated Banking Law Framework 240
III. Political Basis of an Integrated Banking Law Framework 248
IV. Concluding Remarks 252
Conclusion 255
Bibliography 261
Index 303
List of Tables
1.1 National treatment clauses in China’s BITs 47
3.1 Selected cases relating to foreign-funded banks in China 123
4.1 China’s vertical banking law framework 140
4.2 China’s banking laws 142
4.3 China’s banking regulations 143
4.4 China’s banking rules 146
4.5 China’s other banking normative documents 151
4.6 China’s horizontal banking law framework 155
4.7 China’s foreign banking law 156
4.8 China’s domestic banking law 158
4.9 China’s domestic banking law applicable only to state-owned
commercial banks 161
4.10 China’s domestic banking law applicable only to joint-stock
commercial banks 161
4.11 China’s common banking law 163
6.1 Less favourable treatment issues relating to foreign-funded
banks in the WTO TRM meetings, 2002–2011 194
7.1 Overlaps between Commercial Banking Law 2003 and FFB
Regulation 2006 218
8.1 The integrated banking law framework 237
8.2 Enterprise categories and sub-categories in China 241
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List of Abbreviations
ABC Agricultural Bank of China Limited
APEC Asia-Pacific Economic Cooperation
BISD Basic Instruments and Selected Documents
BIT Bilateral Investment Agreement
BOC Bank of China Limited
CBRC China Banking Regulatory Commission
CEPA Closer Economic Partnership Arrangement
CIRC China Insurance Regulatory Commission
CSRC China Securities Regulatory Commission
CCB China Construction Bank Limited
CCP Chinese Communist Party
CMBC China Minsheng Banking Corp., Ltd.
CUP China UnionPay Co., Ltd.
DRI 2004 Detailed Rules for Implementation of the Regulation on
Administration of Foreign-Funded Financial Institutions of 2004
DRI 2006 Detailed Rules for Implementation of the Regulation on
Administration of Foreign-Funded Banks of 2006
DSB The Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement
of Disputes
EC European Communities
ECFA Cross-Strait Economic Cooperation Framework Agreement
EPS Electronic Payment Services
FBSEA Foreign Bank Supervision Enhancement Act of 1991
FFB Foreign-Funded Banks
FFFI Foreign-Funded Financial Institutions
FTA Free Trade Agreement
GAO General Accounting Office of the United States
GATS The General Agreement on Trade in Services
GATT The General Agreement on Tariffs and Trade
GLBA Gramm-Leach-Bliley Act of 1999
GNG Group of Negotiations on Goods
GNS Group of Negotiations on Services
HKEx Hong Kong Exchanges and Clearing Limited
HKSAR Hong Kong Special Administrative Region
HSBC Hongkong and Shanghai Banking Corporation
IBA International Banking Act of 1978
ICBC Industrial and Commercial Bank of China Limited