Foreign banks in China are considering expanding into new businesses to meet growing challenges brought by their domestic competitors, the eighth edition of PwC's Foreign Banks in China survey revealed on Tuesday.

According to the survey, areas that interest foreign banks include offering more services to SMEs, winning mandates from SOEs that are restructuring and going global, offering rural banking services, pushing inland to follow manufacturing growth, and launching e-banking or other innovative digital and internet based services.

A number of banks in the PwC's survey expressed the desire to create more distinctive products, either through attributes or pricing, that provide them with unique market opportunities.

Many also continue to discuss plans to develop more fee-based business, particularly in the wealth management and cash management areas.

"We have noted increased competition among foreign banks, particularly for larger private companies and those that are well placed to consolidate their respective sectors," said PwC China Financial Services Leader Raymond Yung.