Banking

Industrial & Commercial Bank of China (Asia) Ltd.'s shareholders approved its parent company's plan Tuesday to take the unit private for US$1.4 billion.

The move is part of Industrial & Commercial Bank of China Ltd.'s plan to streamline its operations as China's biggest lender by assets expands its Hong Kong operations. ICBC Asia will delist from the Hong Kong stock exchange Dec. 21.

Stanley Wong, deputy general manager of ICBC Asia, said the parent company has no plans to inject capital into the firm in the near term and ICBC Asia has no fundraising plans for now.

China's growth should push up the value of the yuan over time, most economists say, but the pace of its journey will in the end be decided by the back-and-forth of politicians.

Beijing officials may be more inclined in the next few months to listen to Washington lawmakers' complaints that their currency policies are hurting manufacturers and jobs in other countries. Chinese President Hu Jintao will be in the global spotlight with this month's summit of the Group of 20 major economies in Seoul and a state visit to the U.S. planned for January. Diplomats say China wants to make sure those events go smoothly, without turning into shouting matches over China's exchange rate—concerns that would argue for continued appreciation of the currency, which has gained 2% against the dollar since September.

China's central bank, fresh from its first interest-rate increase in nearly three years, said Tuesday it remains concerned about inflationary risks in the country's fast-growing economy, a problem that it indicated could be amplified by the easy-money policies in the U.S. and other developed countries.

In its third-quarter monetary policy report published Tuesday, the People's Bank of China said it will "continue to guide monetary conditions gradually back to a normal level" from crisis-response mode as it faces "relatively big" uncertainties over price trends.

In contrast to the U.S. Federal Reserve, which is widely expected to announce a new program of bond purchases Wednesday to stimulate the economy, China has started to withdraw its stimulus policies. Over the past year, the central bank has reduced the amount of new loans banks can make, and in mid-October it raised benchmark interest rates by a quarter percentage point.

China's securities regulator said it approved an application from Hong Kong's de facto central bank for a Qualified Foreign Institutional Investor license, which would allow the territory to diversify its foreign-exchange reserves into the Chinese yuan.

China has issued QFII licenses to the central banks of Norway and Malaysia as well as to sovereign-wealth funds in Singapore and Abu Dhabi as part of its efforts to increase the use of the yuan around the world.

Any diversification into yuan assets by the Hong Kong Monetary Authority likely will be small at first. Assets denominated in the currency are considered more risky and less liquid than similar assets denominated in fully convertible major currencies, and the investment quotas issued by China are small.