The National Development and Reform Commission (NDRC), the top economic planner, said last week that the country welcomes foreign companies as strategic investors in commercial banks and State-owned insurers as long as the Chinese side holds a controlling stake.

The move is expected to attract more inflows to the financial services sector during the 11th Five-Year Plan (2006-10).

The banking regulator is expected to publish revised administrative rules on foreign banks, allowing them to deal with renminbi retail business.

FDI in the sector jumped to US$12 billion last year, compared with less than US$2 billion in 2004.

The spokesman also touched on China's trade and economic relations with Viet Nam, India and Pakistan with President Hu Jintao yesterday starting his visit to the three countries.

Chong said he believes that Chinese products and services would have an easier access to Viet Nam after the Southeast Asian nation recently concluded negotiations for accession of the World Trade Organization.

Bilateral trade between China and Viet Nam reached US$8.2 billion in 2005, and Viet Nam is one of the major overseas investment destinations of Chinese enterprises.

Trade between China and India is expected to reach US$20 billion this year, two years ahead of the target set by the two governments.

China is also likely to reach a free trade agreement with Pakistan in the near future, Chong said.

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