(Yicai Global) May 25 -- China's cabinet, the State Council, has unveiled plans to allow overseas institutions to set up banks at the free trade zone in Tianjin, and allow them to team up with private investors to found China-foreign joint-stock banks.

They will also be able to team up with private investors to found China-foreign joint-stock banks, the central government said online today.

China hopes that by 2020 the Tianjin FTZ will be among the first in China to set up systems complaint with international investment and trade rules to a form an open, convenient business environment and form a demonstrative zone to pave the way for other FTZs to follow.

The nation will improve pre-entry treatment of foreign investors and open up domestic services to make more clear which foreign investors may not operate in the FTZ, the statement added. Excluding certain areas, China will remove special management requirements, such as minimum operating periods, for foreign-backed companies, and then improve post-entry management by implementing a review system to ensure fair competition.

The FTZ will also back funds that meet requirements laid out by the Mutual Recognition of Funds, a scheme between Hong Kong and the Chinese mainland which allows funds to be distributed in each other's market via a simplified process, the statement said.

Editor: James Boynton