BEIJING, (AFP) - The head of a major Chinese bank has urged the country’s financial sector to step up its expansion overseas, in a sign Beijing may allow banks to resume offshore activities, a report said Friday.
State-owned Bank of China chairman Xiao Gang wrote in an essay that the environment in the wake of the global crisis provided excellent opportunities for expansion, calling this an “inevitable trend”, the Financial Times said.
“The financial institutions devastated by the global crisis still need time to recover,” Xiao wrote. “(Chinese) banks that have the ability should hasten their pace in ‘going abroad’ and increase their international competitiveness.”The report said the essay was published Thursday but did not say where it appeared.
Renewed interest in acquiring overseas institutions would mark a sharp policy change in Beijing, which virtually banned offshore mergers and acquisitions by Chinese financial groups as the crisis broke, the report said.
The ban followed a flurry of activity in late 2007 when Chinese state companies and investors made ill-fated investments in Western firms including ABN Amro, Fortis, Citibank, Blackstone and Morgan Stanley.
Beijing has told banks to avoid trying to break into Western markets through big, politically sensitive deals and concentrate on developing regions, the report said.
Xiao said the banks’ offshore expansion should include acquisitions, while continuing the emphasis on organic growth to follow Chinese corporate customers into overseas markets, the report said.