July 25, 2007 -- London-based Standard Chartered Bank is one of many foreign banks looking to cash in on China's appetite for international-standard financial products -- but it's not just looking at the big coastal cities. After incorporating locally earlier this year, the bank has been opening branches throughout China -- and the rate of expansion has been speeding up.

In July, in addition to Beijing, Tianjin and Shenzhen, the bank also opened branches in Chengdu and Nanjing.

"China has rapid economic development," Yiwen Zhang, manager of company affairs in Standard Chartered for China, told Emerging China. "In addition to first-tier cities such as Beijing, Shanghai, second-tier cities are also our strategic development plan."

Standard Chartered is not new to China. It first opened a branch in Shanghai 1858, 150 years ago.

But local incorporation means that the bank is now able to conduct yuan-denominated business. In line with WTO requirements, China changed the law last December -- previously, foreign banks were not allowed to offer bank accounts in the local currency or offer domestic credit cards and were forced to work through Chinese partners.

Today, Standard Chartered operates in 15 cities in mainland China, with a total of 29 bank outlets, including 12 branches, 14 sub-branches and three representative offices.

"Where our customers are based, that's where we are," Zhang said. "Standard Chartered will cooperate with the government policy and develop the market in western China. At the same time, we would like to work with different types of companies, especially local small and medium enterprises."

Standard Chartered has ambitious development and expansion targets for 2007, he said.

"Standard Chartered networking outlets will be expanded to 40 in mainland China by the end of this year," he said. "Not only in the developed cities, but also second-tier cities will be considered."

Besides Standard Chartered, Citibank and HSBC have opened two new outlets in Beijing and Shenyang on the same day earlier this month. HSBC (China) Company now has a total of 40 outlets in mainland China, including 15 branches and 25 sub-branches.

HSBC announced that the bank supports clients with quality banking services and a huge international network, and will better meet customer needs in Chengdu, in the Sichuan province. Chengdu is a financial center of southwest China

Chengdu and Chongqing are key cities for foreign banks in western China, said Junlei Gu, a banking analyst at Shanghai-based Oriental Securities Company Ltd.

"Compared with domestic banks, the advantages of foreign banks are in management and product innovation," she added. "Foreign banks have a mature development system and advanced technology."