CDB will issue more RMB bonds in HK later this year
Updated: 2010-07-01 07:17
By Joy Li(HK Edition)
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China Development Bank (CDB), the country's mainstay financial institution for overseas investment and financing, will continue its issuance of yuan-denominated bonds in Hong Kong later this year, said Chen Yuan, chairman of CDB, on Wednesday.
The issuance scale, according to Chen, is still under discussion. He made the remarks after giving a luncheon speech in Hong Kong at the World Business Summit 2010 held by the International Chamber of Commerce and the Hong Kong Trade Development Council on Wednesday.
Regarding China's exchange rate policy, the former central banker said the increase in the value of the renminbi (RMB) will be a gradual and steady process. He predicted that a fully convertible RMB will be established before long.
Regarding the role of CDB in international trade, Chen said the bank has largely transformed its role of policy bank into that of a commercial bank.
Chen stressed that CDB's business is operating under the principle of prudence as the asset quality of the bank has remained excellent. As of March 31, 2010, the bank's foreign currency loans amounted to $101 billion, representing 25 percent of all foreign currency loans held by all the mainland banks.
Concerning the Chinese economy, Chen admitted that the European debt crisis has inflicted damage on the Chinese economy, in particular the export sector. However, the People's Bank of China's relaxed monetary policy has staved off an economic slump, since it has speeded up spending on infrastructure projects. Chen emphasized that this stimulus-based new lending is not inflationary.
In his speech, Chen said that "we must reform the international monetary system and establish a new international financial order" and that "the financial crisis has exposed inherent deficiencies, weaknesses and unacceptable risks of the current international monetary system." Chen called for a "multi-polar model where developing economies are better represented in global governance."
Chen made it clear that mainland banks must embark on international expansion efforts to better serve Chinese enterprises' expansion objectives.
China Daily
(HK Edition 07/01/2010 page3)