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Financial services boost China-ASEAN trade

05-24-2010 15:47 BJT

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Agreements in goods trade, service trade and investment are the three main contents of China-ASEAN Free Trade cooperation. In the service trade area, financial services are considered a key component to support economic exchanges between the two sides.

Attracted by the business prospects in the China-ASEAN Free Trade Area, the Industrial and Commercial Bank of China opened its first Vietnam branch last January. It's the first Chinese mainland commercial lender since 1995 to gain approval to set up operations in the country.

ICBC's ASEAN expansion can be traced back more than a decade. In 1995, ICBC established its Singapore branch. In 2007, it acquired Halim Bank, and later transformed it into its Indonesia operation. Now, the world's largest bank by market value has more than 4,000 corporate clients in Indonesia.

Hu Hao, General Manager of International Business Department of ICBC, said, "The establishment of the Free Trade Area will benefit banking cooperation between the 2, which could also fuel economic cooperation in the area. It will help the banking sector to promote its traditional businesses, like trade financing, clearance and settlements. The Free Trade Area could also be a important test field for RMB settlement. If China's banking sectors could seize the opportunity, it will definitely benefit China's financial sector."

China is Indonesia's third largest trading partner. ICBC says most of its clients in Indonesia are Chinese firms who have won major Indonesian construction deals, or those who want to explore local business opportunities.

"Our financial services coverage is very wide ranging. Apart from transitional deposits, lending and settlement services, we also offer services in investment banking, credit cards, e-banking and asset management. " Hu said.

Yuan Bin, President of ICBC Indonesia Ltd, said, "At present, we are working with 2 Chinese companies in Indonesia. One is a passenger vehicle maker, which has just started building plant. Another is a medium and heavy truck manufacturer. These Chinese products are of high quality. And their costs are quite reasonable, compared with European and Japanese ones. So their potential here is good."

The ICBC Indonesia has not only provided services to Chinese clients but also to those from the local business community.

G. Sulistiyanto, Managing Director of Sinar Mas Group, said, "ICBC provides us with trade services. We import raw materials from China, and also export goods to China. ICBC also supported our basic infrastructure construction projects, like the power stations. So funding support from the bank is useful for us."

ICBC says, its Indonesia assets have surged from 50 million US dollars to 420 million now.

It believes the establishment of China-ASEAN Free Trade Area will make it easier for China financial institutions to enter the ASEAN market.

Editor:Zhang Ning |Source:

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