Standard Chartered has agreed to buy nearly 20 percent of Bohai Bank, a new private bank in northern China, in a bid to catch up with international rivals in the Chinese domestic market.

The long-awaited deal comes after other foreign banks such as HSBC and Citigroup have stepped up their investments in China to explore vast market potential.

China allows foreign lenders to own up to 20 percent of Chinese banks.

Standard Chartered has been criticized for its tardiness in making inroads into China, although a deal with such a little-known bank may not satisfy its critics.

Standard Chartered has defended the decision to buy a stake in Bohai.

The bank said Bohai does not suffer from the outstanding bad loans, dubious lending patterns and old-fashioned management systems of the bigger banks, and will be able to invest quickly in new information technology.

Standard Chartered declined to comment on Friday.

Bohai Bank, to be headquartered in Tianjin, was established on the initiative of Dai Xianglong, the former central bank governor who is now mayor of the port city, near Beijing.

(CRI.com November 20, 2004)