Chinese banks are dropping annual fees for credit cards, offering high credit limits and giving away free gifts in order to grab as large a slice as possible of the country’s rapidly growing credit market.

All of the major banks have jumped into the race, with some working hand-in-hand with foreign banks and finance companies, and others opting to fight it out alone.

China Merchants Bank currently holds the largest market share, having issued more than 5 million dual-currency credit cards since 2002. The Shenzhen-based lender has aggressively worked with shops and airlines to expand its client base to students, fashionable women and frequent flyers.

Other banks are racing to catch up, including the Bank of Communications. The BoCom launched its co-branded card with HSBC Holdings in July 2005. The Shanghai-based lender has issued more than 800,000 credit cards to date, and says it expects to meet its target of 1 million cards in circulation by June. ( XINHUA Online )

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