The government's latest move to cut both the benchmark lending rate and the reserve requirement ratio for smaller banks is widely seen as a bid to help SMEs hit hard by a tighter credit regime.
The People's Bank of China on Monday announced a 27-basis-point cut to the commercial banks' benchmark lending rate from yesterday. The deposit rate will remain unchanged. It was the first time the central bank has cut the benchmark lending rate since February 2002.
Meanwhile, the central bank has lowered the reserve ratio for medium and small financial institutions by 100 basis points from Sept 25. Economists and analysts said the selective reduction of the reserve ratio indicated additional efforts to make available more credit to the many cash-strapped SMEs, which formed the main client base of the smaller banks.
"This is meant to make more funds available for lending, since many of these smaller banks were already hard pressed to meet these reserve requirements with their limited deposit base compared to large loan portfolios," Stephen Green, head of research at Standard Chartered Ltd, said.
As the lowered reserve ratio will free up more funds for smaller banks to lend, "it may also be spun as a way of increasing lending to SMEs, than to the large State-owned enterprise clients of large State banks, though it is unclear how well this will work in practice", Green said.
Frank FX Gong, chief economist at JPMorgan Securities , said: "Today's move, in our view, is the beginning of monetary easing and fiscal stimulus, as policymakers strive to maintain a steady and fast growth, against the backdrop of a further downshift in external demand and continuing global financial market turmoil."
The selective reduction of the reserve ratio was seen as another targeted relief measure for SMEs, which have become increasingly important in creating new job opportunities in China.
In early August, the central bank raised the annual loan quota of local commercial banks by 10 percent - 5 percentage points more than the increase for national commercial banks. That was seen as a move to help local SMEs, most of which are customers of smaller local banks.
Economists and investment institutions expected the government would consider further interest rate cuts in the coming month, in conjunction with a more proactive fiscal policy for the rest of the year.
"In the coming months, we are likely to see targeted relief measures for the export sector, reconstruction spending and high levels of infrastructure investment," Jing Ulrich, chairwoman of China equities at JPMorgan Securities, said.
Source:China Daily
Wednesday, September 17, 2008
Reduction likely to boost property
A lower lending rate might not bring more wealth to property developers, but it will boost industry confidence, analysts said.
The central bank cut the benchmark lending rate by 0.27 of a percentage point to 7.2 percent from yesterday, the first time it has reduced the rate since 2002.
"The policy is not likely to deliver a material impact on property developers, as most banks still take a restrained approach on loans to real estate firms," Chris Brooke, president and CEO of CB Richard Ellis , said.
Models of a real estate project at an exhibition in Shenyang, Liaoning province.
"But the rate change is sending a positive sign, showing the government's efforts to maintain the rapid growth of the economy. In that sense, it is good for the property sector," he said.
Jeffrey Lin, general manager of BA Consulting, a Beijing-based real estate service provider, agreed.
"I can't see any direct benefit to property developers but the move will help to boost consumer confidence," Lin said.
Economist Yi Xianrong said the lower rate could have a limited influence on the property sector, as short-term lenders will be the biggest beneficiaries.
Loans due to mature within six months will be reduced by 0.36 percent, but three- to five-year loans and above will be cut by 0.18 and 0.09 percent respectively.
Property developers' loans typically range from three to five years, while homebuyers usually take out mortgages for longer periods.
But some developers have welcomed the rate change as the market undergoes a correction and many are strapped for cash.
Zhang Weike, general manager of Beijing Xinji Investment Co Ltd, said the lower lending rate will reduce operating costs for property developers and ease cash-flow pressure.
"We're actually considering taking on some new projects soon," he said.
Property prices in 70 major Chinese cities rose 5.3 percent year-on-year in August, compared with 7 percent in July, the National Development and Reform Commission said yesterday. The growth rate has dropped for eight months in a row this year, showing signs of nationwide decline after a two-year surge.
New residential property prices rose 6.2 percent year-on-year in August, the NDRC said.
Cities where property price growth exceeded 10 percent year-on-year last month included Haikou, Yinchuan and Beijing, with growth rates of 16.5 percent, 12.4 percent and 11.7 percent, respectively.
Prices of homes for resale rose 3.9 percent year-on-year in August, 2.1 percentage points below the July rate. Non-residential property prices grew 4 percent last month, down 0.9 percentage points from July.
Source:China Daily
The central bank cut the benchmark lending rate by 0.27 of a percentage point to 7.2 percent from yesterday, the first time it has reduced the rate since 2002.
"The policy is not likely to deliver a material impact on property developers, as most banks still take a restrained approach on loans to real estate firms," Chris Brooke, president and CEO of CB Richard Ellis , said.
Models of a real estate project at an exhibition in Shenyang, Liaoning province.
"But the rate change is sending a positive sign, showing the government's efforts to maintain the rapid growth of the economy. In that sense, it is good for the property sector," he said.
Jeffrey Lin, general manager of BA Consulting, a Beijing-based real estate service provider, agreed.
"I can't see any direct benefit to property developers but the move will help to boost consumer confidence," Lin said.
Economist Yi Xianrong said the lower rate could have a limited influence on the property sector, as short-term lenders will be the biggest beneficiaries.
Loans due to mature within six months will be reduced by 0.36 percent, but three- to five-year loans and above will be cut by 0.18 and 0.09 percent respectively.
Property developers' loans typically range from three to five years, while homebuyers usually take out mortgages for longer periods.
But some developers have welcomed the rate change as the market undergoes a correction and many are strapped for cash.
Zhang Weike, general manager of Beijing Xinji Investment Co Ltd, said the lower lending rate will reduce operating costs for property developers and ease cash-flow pressure.
"We're actually considering taking on some new projects soon," he said.
Property prices in 70 major Chinese cities rose 5.3 percent year-on-year in August, compared with 7 percent in July, the National Development and Reform Commission said yesterday. The growth rate has dropped for eight months in a row this year, showing signs of nationwide decline after a two-year surge.
New residential property prices rose 6.2 percent year-on-year in August, the NDRC said.
Cities where property price growth exceeded 10 percent year-on-year last month included Haikou, Yinchuan and Beijing, with growth rates of 16.5 percent, 12.4 percent and 11.7 percent, respectively.
Prices of homes for resale rose 3.9 percent year-on-year in August, 2.1 percentage points below the July rate. Non-residential property prices grew 4 percent last month, down 0.9 percentage points from July.
Source:China Daily
Parity rate climbs
The central parity rate for the yuan against the US dollar rose to 6.8203 yesterday, the largest daily rise in seven weeks.
The daily mid-point, set by the central bank before trading, climbed 0.37 percent from Friday's 6.8458. But the yuan then weakened to 6.857 a dollar at 5:30 pm in Beijing yesterday, according to China's Foreign Exchange Trade System.
"The higher mid-point, which in theory contradicts the interest rate cut, implies the central bank wants to stabilize the yuan's exchange rate," Liu Dongyuan, a Shenzhen-based foreign exchange analyst with China Merchants Bank, said. "A drastic depreciation may lead to a capital outflow."
The central bank lowered the one-year lending rate to 7.2 percent from yesterday.
The yuan has gained against the US dollar by about 20 percent since China decided to scrap its peg to the US dollar in 2005. Over the past three years, there have been constant worries that the appreciation has attracted an influx of hot money, which has contributed to bubbles in China's stock and property markets.
But now, analysts warn there is a risk of rapid capital outflow, as the yuan's appreciation appears to be coming to an end and local real estate and share market prices decline.
Also yesterday, the one-year dollar/yuan NDFs hit a fresh year-high of 6.8210 from Friday's close of 6.7500. The NDFs' latest level implies the yuan will depreciate against the dollar by 0.01 percent over the next 12 months from yesterday's spot mid-point of 6.8203. It was the first time that one-year NDFs have implied yuan depreciation since September 2003.
Source:China Daily
The daily mid-point, set by the central bank before trading, climbed 0.37 percent from Friday's 6.8458. But the yuan then weakened to 6.857 a dollar at 5:30 pm in Beijing yesterday, according to China's Foreign Exchange Trade System.
"The higher mid-point, which in theory contradicts the interest rate cut, implies the central bank wants to stabilize the yuan's exchange rate," Liu Dongyuan, a Shenzhen-based foreign exchange analyst with China Merchants Bank, said. "A drastic depreciation may lead to a capital outflow."
The central bank lowered the one-year lending rate to 7.2 percent from yesterday.
The yuan has gained against the US dollar by about 20 percent since China decided to scrap its peg to the US dollar in 2005. Over the past three years, there have been constant worries that the appreciation has attracted an influx of hot money, which has contributed to bubbles in China's stock and property markets.
But now, analysts warn there is a risk of rapid capital outflow, as the yuan's appreciation appears to be coming to an end and local real estate and share market prices decline.
Also yesterday, the one-year dollar/yuan NDFs hit a fresh year-high of 6.8210 from Friday's close of 6.7500. The NDFs' latest level implies the yuan will depreciate against the dollar by 0.01 percent over the next 12 months from yesterday's spot mid-point of 6.8203. It was the first time that one-year NDFs have implied yuan depreciation since September 2003.
Source:China Daily
Stocks slump 4.47% in global battering
SHANGHAI: Hit by the latest ripple effect of the US financial crisis, the benchmark index tumbled 4.47 percent to 1986.64, dipping below 2000 points for the first time in 22 months.
The Shanghai Composite Index plunged 93.04 points, and the smaller Shenzhen Component Index dropped 61.46 points, or 0.89 percent, to end at 6873.61.
Turnover on the two bourses was 47.3 billion yuan, up 42.5 percent from last Friday. Total market capitalization shrank 3.7 percent to 12.9 trillion yuan yesterday.
The index was dragged under the 2000-point barrier by a sharp fall in bank shares.
Analysts said fallout from the failure of Lehman Brothers and the fire sale of Merrill Lynch has unnerved investors, who began dumping bank shares at the opening bell.
"The US stock market turmoil overnight dampened Chinese investor confidence and knocked the emerging financial markets," Zhu Haibin, an analyst at Essence Securities, said.
On Monday, the major global stock indexes, in response to Lehman's demise, suffered their worst plunge since 9/11. The Dow Jones slid 504.48 points, or 4.42 percent, to end at 10917.51. The S&P 500 index sank 4.71 percent, to close at 1192.7. The NASDAQ composite index fell 3.6 percent, to 2179.91.
Lehman Brothers, the fourth largest investment bank in the United States, announced its bankruptcy on Monday after failed rescue talks with Barclays Plc and Bank of America.
Bank of America will instead buy into Merrill Lynch with $50 billion, while insurer AIG also needs to raise $40 billion to survive the credit storm.
Monday's lending rate cut by the central bank also contributed to the bank stocks' slide, analysts said.
The People's Bank of China cut the one-year lending rate by 0.27 of a percentage point to 7.3 percent, but the deposit rates stay unchanged.
"Large banks were negatively affected by this news because a lending rate cut with an unchanged deposit rate will squeeze the banks' net interest profits, and therefore restrain their profit growth," Wei Daoke, an analyst at Shenyin & Wanguo Securities Co Ltd, said.
The central bank also lowered the reserve requirement ratio for small banks by 1 percentage point to 16.5 percent from Sept 25.
That reduction "for small and medium-sized banks is a more meaningful liquidity easing, as the elevated level of RRR has been constraining their business operation", Frank FX Gong, chief economist at JPMorgan Securities , said.
All 14 bank shares declined yesterday, with nine down to their daily limits, led by Bank of Beijing and Shenzhen Development Bank, both of which slid 10.01 percent.
Shares in Bank of China plummeted 9.17 percent to 3.17 yuan. Industrial and Commercial Bank of China slid 9.95 percent to 3.80 yuan.
Source:China Daily
The Shanghai Composite Index plunged 93.04 points, and the smaller Shenzhen Component Index dropped 61.46 points, or 0.89 percent, to end at 6873.61.
Turnover on the two bourses was 47.3 billion yuan, up 42.5 percent from last Friday. Total market capitalization shrank 3.7 percent to 12.9 trillion yuan yesterday.
The index was dragged under the 2000-point barrier by a sharp fall in bank shares.
Analysts said fallout from the failure of Lehman Brothers and the fire sale of Merrill Lynch has unnerved investors, who began dumping bank shares at the opening bell.
"The US stock market turmoil overnight dampened Chinese investor confidence and knocked the emerging financial markets," Zhu Haibin, an analyst at Essence Securities, said.
On Monday, the major global stock indexes, in response to Lehman's demise, suffered their worst plunge since 9/11. The Dow Jones slid 504.48 points, or 4.42 percent, to end at 10917.51. The S&P 500 index sank 4.71 percent, to close at 1192.7. The NASDAQ composite index fell 3.6 percent, to 2179.91.
Lehman Brothers, the fourth largest investment bank in the United States, announced its bankruptcy on Monday after failed rescue talks with Barclays Plc and Bank of America.
Bank of America will instead buy into Merrill Lynch with $50 billion, while insurer AIG also needs to raise $40 billion to survive the credit storm.
Monday's lending rate cut by the central bank also contributed to the bank stocks' slide, analysts said.
The People's Bank of China cut the one-year lending rate by 0.27 of a percentage point to 7.3 percent, but the deposit rates stay unchanged.
"Large banks were negatively affected by this news because a lending rate cut with an unchanged deposit rate will squeeze the banks' net interest profits, and therefore restrain their profit growth," Wei Daoke, an analyst at Shenyin & Wanguo Securities Co Ltd, said.
The central bank also lowered the reserve requirement ratio for small banks by 1 percentage point to 16.5 percent from Sept 25.
That reduction "for small and medium-sized banks is a more meaningful liquidity easing, as the elevated level of RRR has been constraining their business operation", Frank FX Gong, chief economist at JPMorgan Securities , said.
All 14 bank shares declined yesterday, with nine down to their daily limits, led by Bank of Beijing and Shenzhen Development Bank, both of which slid 10.01 percent.
Shares in Bank of China plummeted 9.17 percent to 3.17 yuan. Industrial and Commercial Bank of China slid 9.95 percent to 3.80 yuan.
Source:China Daily
ADB trims growth expectations for '09
The Asian Development Bank yesterday cut China's economic growth forecast to 9.5 percent from 9.8 percent for 2009, due to the expected reduced trade surplus and weakening domestic investment, but maintained its previous forecast of 10 percent growth for this year.
It also warned that inflation could reach 7 percent this year, much higher than the 4.8 percent target set by the government. The high inflation is mainly due to the exceptionally high rate in the first half of this year, the bank said. China's consumer inflation dropped to 4.9 percent in August from February's peak of 8.7 percent.
Given the signs of recent monetary policy relaxation, Zhuang Jian, a senior economist with the ADB in Beijing, said China's economic growth in the third and fourth quarters could stand at around 9.5 percent despite the global economic slowdown, which led many economists to forecast growth of less than 9 percent in the two quarters.
The central bank cut the cost of bank loans and reduced the reserve requirement ratio for smaller financial institutions on Monday. "This marks the start of a more relaxed policy, although the central bank remains cautious ," Zhuang said. "Policymakers are tilted a bit toward maintaining economic growth."
In the coming months, controls over the loan quota may be further eased, he said, which will help bolster economic growth.
Rising domestic production costs and the continually weakening global economy, which reduces demand for Chinese products, would further slow China's exports next year, said Zhuang.
China's exports rose 22.4 percent year-on-year in the first eight months of 2008, down from 27.7 percent in the same period last year.
Growth in fixed-asset investment is also expected to fall, further reducing overall economic growth next year, he said at yesterday's release of the Asian Development Outlook report.
As US financial market turbulence further worsens, the Manila-based bank said Asia will be hit badly by the current financial crisis.
"The turmoil of the last eight days points to the clear and present danger that growth in the US could slip very, very sharply," ADB Chief Economist Ifzal Ali said.
For Asia, "the biggest risk was that the US financial crisis would affect the G3 economies indefinitely, hurting Asian exports and financial markets", he said. "If the impact goes beyond 2009 that will be very, very negative for Asia."
Economic growth in Asia this year is expected to stand at 7.5 percent and 7.2 percent next year, according to the report. In April, the bank forecast that growth would be 7.6 percent this year.
"If the subprime crisis worsens significantly, Asia is bound to suffer much more serious financial effects, including an abrupt reversal of the capital inflows that have held up well so far," the bank said in its report.
Source:China Daily
It also warned that inflation could reach 7 percent this year, much higher than the 4.8 percent target set by the government. The high inflation is mainly due to the exceptionally high rate in the first half of this year, the bank said. China's consumer inflation dropped to 4.9 percent in August from February's peak of 8.7 percent.
Given the signs of recent monetary policy relaxation, Zhuang Jian, a senior economist with the ADB in Beijing, said China's economic growth in the third and fourth quarters could stand at around 9.5 percent despite the global economic slowdown, which led many economists to forecast growth of less than 9 percent in the two quarters.
The central bank cut the cost of bank loans and reduced the reserve requirement ratio for smaller financial institutions on Monday. "This marks the start of a more relaxed policy, although the central bank remains cautious ," Zhuang said. "Policymakers are tilted a bit toward maintaining economic growth."
In the coming months, controls over the loan quota may be further eased, he said, which will help bolster economic growth.
Rising domestic production costs and the continually weakening global economy, which reduces demand for Chinese products, would further slow China's exports next year, said Zhuang.
China's exports rose 22.4 percent year-on-year in the first eight months of 2008, down from 27.7 percent in the same period last year.
Growth in fixed-asset investment is also expected to fall, further reducing overall economic growth next year, he said at yesterday's release of the Asian Development Outlook report.
As US financial market turbulence further worsens, the Manila-based bank said Asia will be hit badly by the current financial crisis.
"The turmoil of the last eight days points to the clear and present danger that growth in the US could slip very, very sharply," ADB Chief Economist Ifzal Ali said.
For Asia, "the biggest risk was that the US financial crisis would affect the G3 economies indefinitely, hurting Asian exports and financial markets", he said. "If the impact goes beyond 2009 that will be very, very negative for Asia."
Economic growth in Asia this year is expected to stand at 7.5 percent and 7.2 percent next year, according to the report. In April, the bank forecast that growth would be 7.6 percent this year.
"If the subprime crisis worsens significantly, Asia is bound to suffer much more serious financial effects, including an abrupt reversal of the capital inflows that have held up well so far," the bank said in its report.
Source:China Daily
Asia-Pacific stocks slide on U.S. financial woes
Asia's main stock markets plummeted Tuesday, with Hong Kong, Tokyo, Shanghai and Taipei stocks down around 5 percent, as part of the reaction to the latest U.S. financial crisis triggered by the collapse of investment bank Lehman Brothers.
After Lehman Brothers filed for bankruptcy and Merrill Lynch agreed to be taken over by Bank of America, the Dow Jones Industrial Average tumbled 4.42 percent, the steepest drop since the Sept. 11, 2001 attacks.
Tokyo stocks nosedived 605.04 points on Tuesday, or 4.95 percent, to 11,609.72 points, its lowest closing level in more than three years.
Japan's central bank injected 2.5 trillion yen on Tuesday into money markets to ease the impact of the failure of the Lehman Brothers.
But Japan's Finance Minister Bunmei Ibuki reassured investors that the Lehman bankruptcy will not seriously damage the Japanese financial system.
"Considering the conditions of each financial institution's self-owned capital, we do not have to worry about the Japanese financial system," Ibuki said at a press conference.
Hong Kong's blue-chip Hang Seng Index also shed 5.4 percent to 18,300.61 on Tuesday, its lowest point in nearly two years.
Turnover rose to 88.42 billion HK dollars from last Friday's 57.77 billion HK dollars .
"Today was a bloodbath," said Alex Tang, head of research at Core Pacific-Yamaichi, who noted that trading volume was its highest in months. "This was panic selling ... they just want to liquidate their positions."
Phillip Capital Management strategist Y.K. Chan said 18,000 is the key support line for Hang Seng Index in the near term. But he added "we're in the middle of a crisis, so valuation offers little comfort."
Taiwan's stock market tumbled 4.89 percent, falling below the key 6,000 level for the first time since November 2005. The situation is similar in Shanghai's stock markets where the benchmark Shanghai Composite Index lost 93.03 points, or 4.47 percent, sinking below the 2,000-point mark to close at 1,986.64.
Qin Xiaobin, an analyst with the Beijing-based Yinhe Securities, also attributed the plunge to the lending interest rate cut announced by the Chinese central bank and investors' lingering concern over the country's economy.
On Monday, the People's Bank of China's announced the benchmark interest rate for one-year yuan-denominated loans would be lowered 0.27 percentage point on Tuesday, its first cut since October 2004.
The benchmark Korea Composite Stock Price Index slashed90.17 points, or 6.1 percent, at an 18-month low of 1,387.75 on Tuesday.
"We are closely monitoring the financial markets and will take appropriate steps to stabilize markets if necessary. We will study measures to ease excessive volatility in the foreign exchange rates." South Korea's Vice Financial Minister Kim Dong-Soo told reporters on Tuesday.
Other Asian-Pacific stock markets also experienced severe plunges as the fallout from U.S. financial market turmoil continued.
Philippine shares plunged more than 4 percent for the second straight day. The Philippine Stock Exchange's 30-share composite index lost 114.44 points, or 4.51 per cent, to close at 2,421.72 from Monday's finish of 2,536.16.
The benchmark S&P/ASX200 index in Australia was down 66.9 points, or 1.39 percent at 4750.8, while the broader All Ordinaries lost 75.2 points, or 1.54 percent to 4799.8.
The shares prices in Singapore ended lower on Tuesday with the benchmark Straits Times Index down 25.12 points or 1.01 percent to 2,461.43 points.
The Stock Exchange of Thailand index moved down 17.83 points, or 2.78 percent, to close at 624.56 points on Tuesday.
Source:Xinhua
After Lehman Brothers filed for bankruptcy and Merrill Lynch agreed to be taken over by Bank of America, the Dow Jones Industrial Average tumbled 4.42 percent, the steepest drop since the Sept. 11, 2001 attacks.
Tokyo stocks nosedived 605.04 points on Tuesday, or 4.95 percent, to 11,609.72 points, its lowest closing level in more than three years.
Japan's central bank injected 2.5 trillion yen on Tuesday into money markets to ease the impact of the failure of the Lehman Brothers.
But Japan's Finance Minister Bunmei Ibuki reassured investors that the Lehman bankruptcy will not seriously damage the Japanese financial system.
"Considering the conditions of each financial institution's self-owned capital, we do not have to worry about the Japanese financial system," Ibuki said at a press conference.
Hong Kong's blue-chip Hang Seng Index also shed 5.4 percent to 18,300.61 on Tuesday, its lowest point in nearly two years.
Turnover rose to 88.42 billion HK dollars from last Friday's 57.77 billion HK dollars .
"Today was a bloodbath," said Alex Tang, head of research at Core Pacific-Yamaichi, who noted that trading volume was its highest in months. "This was panic selling ... they just want to liquidate their positions."
Phillip Capital Management strategist Y.K. Chan said 18,000 is the key support line for Hang Seng Index in the near term. But he added "we're in the middle of a crisis, so valuation offers little comfort."
Taiwan's stock market tumbled 4.89 percent, falling below the key 6,000 level for the first time since November 2005. The situation is similar in Shanghai's stock markets where the benchmark Shanghai Composite Index lost 93.03 points, or 4.47 percent, sinking below the 2,000-point mark to close at 1,986.64.
Qin Xiaobin, an analyst with the Beijing-based Yinhe Securities, also attributed the plunge to the lending interest rate cut announced by the Chinese central bank and investors' lingering concern over the country's economy.
On Monday, the People's Bank of China's announced the benchmark interest rate for one-year yuan-denominated loans would be lowered 0.27 percentage point on Tuesday, its first cut since October 2004.
The benchmark Korea Composite Stock Price Index slashed90.17 points, or 6.1 percent, at an 18-month low of 1,387.75 on Tuesday.
"We are closely monitoring the financial markets and will take appropriate steps to stabilize markets if necessary. We will study measures to ease excessive volatility in the foreign exchange rates." South Korea's Vice Financial Minister Kim Dong-Soo told reporters on Tuesday.
Other Asian-Pacific stock markets also experienced severe plunges as the fallout from U.S. financial market turmoil continued.
Philippine shares plunged more than 4 percent for the second straight day. The Philippine Stock Exchange's 30-share composite index lost 114.44 points, or 4.51 per cent, to close at 2,421.72 from Monday's finish of 2,536.16.
The benchmark S&P/ASX200 index in Australia was down 66.9 points, or 1.39 percent at 4750.8, while the broader All Ordinaries lost 75.2 points, or 1.54 percent to 4799.8.
The shares prices in Singapore ended lower on Tuesday with the benchmark Straits Times Index down 25.12 points or 1.01 percent to 2,461.43 points.
The Stock Exchange of Thailand index moved down 17.83 points, or 2.78 percent, to close at 624.56 points on Tuesday.
Source:Xinhua
ICBC New York branch granted business license
The New York branch of Industrial and Commercial Bank of China Ltd. , the world's largest bank by market capitalization, was officially granted business license Tuesday.
"It is an exciting moment for our bank, since it marks an important milestone for our international business development," said Wu Bin, chief representative of the ICBC New York Representative Office, at the signing ceremony held in the New York State Banking Department.
In accordance with the business license, ICBC New York branch will engage in wholesale deposits, loans, trade finance, U.S. dollar clearing, treasury and other banking businesses.
"We will make all our efforts to provide quality financial services to both Chinese and American clients," Wu said. The opening of ICBC's New York branch will provide one more bridge between China and the United States, and will contribute to the Sino-U.S. commercial and financial exchanges, Wu added.
During his address at the ceremony, New York State Banking Superintendent Richard H. Neiman thanked ICBC for its confidence in the U.S. economy and in New York City as the world financial center.
Neiman called the signing of the license "historic" given the financial turmoil the Wall Street is experiencing. He said this turbulent time actually also means opportunities for foreign banks, which the New York State Banking Department has always attached great importance to. He hoped the collaboration between his department and ICBC will stay strong and profitable in the years to come.
ICBC filed application to open branch in New York in April, 2007, and obtained official approval by the U.S. Federal Reserve on Aug. 5 this year. The ICBC New York branch is scheduled to start operation in October.
"It is an exciting moment for our bank, since it marks an important milestone for our international business development," said Wu Bin, chief representative of the ICBC New York Representative Office, at the signing ceremony held in the New York State Banking Department.
In accordance with the business license, ICBC New York branch will engage in wholesale deposits, loans, trade finance, U.S. dollar clearing, treasury and other banking businesses.
"We will make all our efforts to provide quality financial services to both Chinese and American clients," Wu said. The opening of ICBC's New York branch will provide one more bridge between China and the United States, and will contribute to the Sino-U.S. commercial and financial exchanges, Wu added.
During his address at the ceremony, New York State Banking Superintendent Richard H. Neiman thanked ICBC for its confidence in the U.S. economy and in New York City as the world financial center.
Neiman called the signing of the license "historic" given the financial turmoil the Wall Street is experiencing. He said this turbulent time actually also means opportunities for foreign banks, which the New York State Banking Department has always attached great importance to. He hoped the collaboration between his department and ICBC will stay strong and profitable in the years to come.
ICBC filed application to open branch in New York in April, 2007, and obtained official approval by the U.S. Federal Reserve on Aug. 5 this year. The ICBC New York branch is scheduled to start operation in October.
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