Visa Inc and Mastercard Inc welcome China's plans to open up its market for clearing domestic bank card transactions, as they stand to gain access to a growing market worth more than $1 trillion a year. While China lags behind countries such as the United States in spending on credit, habits are changing fast and the Chinese are increasingly swiping plastic to satisfy their growing appetite for consumer goods. The State Council, China's cabinet, said after a weekly meeting that foreign firms that meet its criteria could set up their own clearing companies. It did not provide details. Visa, the world's largest credit and debit card company, welcomed the move. "We look forward to seeing the specific details and working with people within China to figure out what we need to do to participate in that marketplace, where we believe we can add a lot of value," Chief Executive Officer Charlie Scharf said on a conference call, following the release of its fourth-quarter earnings.   Household debt in China amounted to just 37 percent of GDP at the end of July, compared with 81 percent in the United States. But the Chinese, renowned for being thrifty, are changing fast. China's total outstanding credit card balances, while less than 10 percent of household debt, were a third higher at the end of June than a year ago, according to the People's Bank of China. The amount outstanding per card has increased by more than two-thirds in two years. Mastercard, the second-largest payments company globally, also welcomes the opportunity to expand in the world's second-largest economy. "We will continue to monitor closely and look forward to the day when we can compete for domestic business in China," MasterCard said in a statement emailed to Reuters on Thursday. The explosion in online retailers, fueled by increasingly well-heeled youth, is adding to the allure of plastic. Access for foreign firms to China's fast-growing electronic payments market is a controversial issue. China promised to reform and free its electronic payments market after the World Trade Organization (WTO) said in 2012 that its behavior discriminated against U.S. firms. It was not immediately clear if the move would allow foreign firms to process credit and debit card payments made in yuan in China. In July 2012, the world trade body held that China had discriminated against U.S. bank card suppliers in its electronic payments market by favoring state behemoth China UnionPay, following a complaint to the WTO by the United States. The trade watchdog found that UnionPay had an illegal monopoly on yuan payment cards issued and used in China, but rejected the U.S. claim that UnionPay was an "across-the-board monopoly supplier. "As a market-orientated business, China UnionPay will operate under the same regulations as other banks, to ensure equal market competition in a way that complies with the law," said UnionPay in a statement emailed to Reuters. As the world's largest card brand with 3.53 billion cards in circulation since its founding in 2002, UnionPay's rise came at a time of explosive growth in China's interbank card market. Total bank card transactions leapt 37 percent to 21.8 trillion yuan ($3.6 trillion) in China in 2012, from 2011. China requires all foreign card companies to piggyback on UnionPay's network when accepting yuan payments. This means firms such as Visa and Mastercard must give a cut of every credit or debit card transaction to UnionPay and the card issuing bank. In most other countries, the foreign card issuers pay only the bank because they use their own network. Wednesday's promise to free a business sector is the latest step taken by China this year to open up its financial markets. The Chinese cabinet last month also said it was freeing up the domestic courier market, potentially opening the way to competition by firms such as FedEx Corp and United Parcel Services. But that announcement also gave no details, and it was unclear which curbs would be eased. (Reuters)