Banking Industry Restructuring in China

One of China's biggest banks plans to cut more than 100,000 jobs, or about one-third of its workforce, as it prepares to sell its first shares to foreign investors, according to a major state newspaper.

The Construction Bank, China's third-largest state-owned commercial bank, is expected to sell up to US$5 billion worth of shares in a public offering sometime in the next two years. Other major state banks are also expected to raise money through share sales.

The communist government is trying to turn its debt-laden banks into profitable, competitive businesses as it prepares to open its financial markets to foreign rivals as part of its commitment to the World Trade Organization. Last month, the government announced a plan to spend US$45 billion to replenish the capital of the Construction Bank and another of its four main state-owned commercial banks.

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