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China's first

international

investment

bank opens

BEIJING: China's first international investment bank, partly owned by Morgan Stanley Group opened for business in what western bankers said would be a test of the merger of western and Chinese management systems.

China International Capital Corp has registered capital of $100 million and is 42.5 percent owned by China People's Construction Bank and 35 percent by Morgan Stanley Group.

Western bankers praised Morgan Stanley's initiative in setting up the first such venture in China but said time would be needed to assess how two such different management systems would work together.

They questioned how independent and objective the bank's recommendations could be, given its close links to state-owned organisations. The other shareholders, each with 7.5 percent, are China National Investment and Guarantee Corp, Government of Singapore Investment Corp and Mingly Corp.

Its business will include issuing and underwriting shares at home and abroad, bond trading, fund issue and management, direct investment, mergers and acquisitions, project financing and advisory services, forex trading, the management of foreign assets and interbank business, the China Securities newspaper said.

The bank started preparatory work after receiving approval from the People's Bank, the central bank, last September.

The new bank will have to marry two management cultures, with the gap wider in banking than other industries because the Chinese side lacks experience in investment banking, one western banker said.-Reuter