Shanghai, China ? Citibank on Thursday became the first international bank to offer financial services to Chinese customers, a significant step to open China’s ailing financial system to more competition.

For the time being, business with Chinese depositors is restricted to foreign currency. But under the terms of the World Trade Organization, which China joined in December, foreign banks will be free to deal in the local currency in five years.

“China’s economic success over the past two decades has raised the living standards of hundreds of millions of Chinese citizens,” said Richard Stanley, Citibank China’s country corporate officer. “We expect that the market for consumer banking services here will grow steadily in the coming years.”

With Thursday’s Citibank opening and future actions by foreign banks, China no longer can claim a monopoly over one of the world’s largest personal savings markets. Chinese citizens have nearly $1 trillion stashed away.

Until now, non-Chinese banks could conduct business only with non-Chinese residents or foreign companies. Citibank may be the first to broaden its role, but it is not expected to be alone. Despite red tape, more than 100 international banks already are in the country, lining up for what they see as the post-WTO gold rush.

Local banks have not been able to take advantage of their special position. Victims of central planning, state banks lumber along, practically insolvent. Massive loans to bankrupt state-owned enterprises vanish down the drain. Even the best-managed institutions, such as the Bank of China, are dogged with crippling debts and corruption scandals that undermine their credibility. Competitive financial services remain as foreign as profit making.