Thirty years of reform

She compared the current financial situation in rural areas with that of the cities 30 years ago, at the dawn of China's reform and opening up drive. She argued that putting the same amount of effort into rural markets would lift them, within another 30 years, to the standards now prevailing in the cities.

China's rural part still a great potential market [CFP]

She also called for more banks including city banks to join with major state-owned banks to explore and serve the rural market.

One city bank -- Nanchong Commercial Bank, based in Sichuan Province -- established the first village bank in Yilong County in the province in March 2007. And since the second half of last year, Bank of Beijing, Bank of Communications, Mingsheng Bank, Bank of Nanjing and other urban-based banks have set up village banks in rural areas.

Retired Bank of China economist Tan Yaling said Chinese banks had a better understanding of rural markets than their foreign rivals. These domestic banks had to seize the chance and not lose ground to foreign competitors, she said.

The source from HSBC said there would most likely be more cooperation than competition, because the growth of rural finance would be supported by all financial institutions.

Zhang said no financial institution alone could serve the whole rural market and competition would raise the level of rural bank services.

(Xinhua News Agency April 24, 2009)