HONG KONG – China continues to battle corruption in its banking sector.

The Bank of China, the country's largest foreign exchange lender, has removed its Vice-Chairman Liu Jinbao. He has been arrested on charges of fraud and corruption. Mr. Liu formerly served as the head of the Hong Kong branch.

Only days earlier, former Bank of China general manager Liang Xiaoting, was formally charged for taking hundreds of thousands of dollars in bribes. China's state-controlled media reports that Mr. Liang admitted to taking bribes. Newspapers in China say Communist Party leaders are determined to tackle corruption in the nation's state-owned banks.

Many experts believe China’s banking system is in a dire situation because forced loans to inefficient government-operated industries have drained the nation’s capital supplies, costing over $100 billion US in government bailouts. The vast majority of these loans will never be repaid.

The confluence of corruption and Communist control have impeded the growth of the Chinese economy by limiting foreign investment and driving out foreign businesses that try to set up shop in China. Pepsico Corporation pulled out of China after 18 years of operation without a profit, and Blockbuster, the video-rental corporation, recently announced that it will close its China operations because of corruption.