Foreign competitors are unlikely to snatch a big share of the financial services market as China's entry to the World Trade Organisation ushers in unprecedented market access.
However, newcomers might pose a serious challenge to domestic rivals in critical markets, threatening to further erode their bottom lines, said analysts.
China's debt-ridden banks, along with the securities industry, are expected to bear the brunt of further liberalisation of the financial services market in the wake of China's WTO entry.
Foreign banks are confined to foreign-currency transactions in select cities and yuan business only in pilot programmes.
In a bilateral pact with the United States, China agreed to lift, upon accession, geographical curbs on foreign banks' foreign-currency transactions and yuan dealings with foreign clients.
Under the agreement, Beijing will lift bans on foreign banks' yuan dealings with Chinese enterprises two years after accession, and with individuals five years from the date of entry.
Foreign banks will be allowed to offer yuan services in four cities upon accession, with four more cities added each year thereafter. Nationwide market access is due in five years.