NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, May 31, 2012

SHANGHAI—China’s pledge to give private capital real access to the nation’s lucrative banking sector has triggered more skepticism than excitement, with analysts saying entry barriers remain firmly in place.

As part of Beijing’s broad campaign to boost a slowing economy, several government arms, ranging from the railways ministry to the banking and securities regulators, have unveiled measures aimed at encouraging more investment by private businesses in sectors traditionally dominated by the state.

The reforms rolled out by the bank regulator include allowing private firms to own more than 20% of a regional lender, permitting microfinancing firms to be restructured into …