April 3, 2012

Chinese Premier Wen Jiabao delivered an unusually direct appeal for financial reform in the world's No. 2 economy, calling the nation's big four state-owned banks a monopoly that needs to be broken and saying a pilot program from reform will be expanded nationwide.

In comments carried on China National Radio, Mr. Wen said China's banks are able to make profits "too easily," thanks to their monopolistic position in the market. He said that some successful recent financial reforms in the city of Wenzhou, in Zhejiang province, would be expanded nationwide.

In late March, China approved a broad package of financial reforms in Wenzhou, a city known for entrepreneurship and underground lending, in what may be a prelude to a national effort to liberalize China's creaking financial system.

China allowed private lenders in Wenzhou to operate as investment companies to help small and medium-size enterprises secure financing.

Source: Wall Street Journal