Central Bank of China

PRESS RELEASE Release Date: December 8, 2003



Overview of offshore banking units (October 2003)

At the end of October, 2003, there were 71 offshore banking units(OBUs)in operation. Of these, 42 belonged to domestic banks and 29 belonged to foreign banks. The combined assets of all OBUs amounted to US$59.690 billion at the end of October, 2003; increased by US$11.208 billion or 23.12%compared with the same month of the previous year. Domestic bank OBUs accounted for US$40.207 billion or 67%of these combined assets, and foreign bank OBUs accounted for US$19.483 billion or 33%of the total.

Based on balance sheet analysis, the OBUs' main sources of funds were due to related offices and deposits by financial institutions, which together accounted for 67%of total liabilities. Of these, due to related offices accounted for 46%of total liabilities, deposits by financial institutions situated locally for 12%, those by financial institutions located overseas for 5%, and inter-OBU deposits for 4%. The other sources of funds included deposits by non-financial institutions, accounting for 27%of total liabilities, and other liabilities plus the equity of head office for 6%. In terms of the area of origin, Asia accounted for 68%, followed by America with 20%, Europe with 9%, and other areas with 3%.

The main uses of funds were due from related offices and deposits with financial institutions which together accounted for 57%of total assets. A further breakdown shows 39%was due from related offices, 10%was deposited overseas, 4%with other domestic financial institutions and 4%with domestic OBUs. The other uses of funds included loans, accounting for 26%of total assets, security investments for 12%, and other assets for 5%. Asia was the main destination for funds, accounting for 66%, followed by America with 20%, Europe with 11%, and other areas with 3%.

The total value of all outstanding loans made by OBUs at the end of October, 2003, amounted to US$15.283 billion, of which 81%was extended to oversea debtors, and 19%to local debtors. Of this amount, long-term loans extended to oversea debtors accounted for US$7.503 billion, followed by short-term loans extended to oversea debtors with US$4.840 billion, and loans extended to local debtors with US$2.940 billion. The volume of export related banking business of all OBUs in October was US$6.181 billion. Of this amount, export collection plus export remittance accounted for US$4.829 billion, and export negotiation for US$1.352 billion.

The turnover of foreign exchange trading by all OBUs in October was US$6.119 billion. Of this amount, spot transactions accounted for US$4.105 billion, followed by outright forwards with US$0.900 billion, and foreign exchange swaps with US$1.114 billion.

The turnover of trading other derivative products by all OBUs in October was US$4.706 billion. Of this amount, options accounted for US$2.691 billion, followed by financial futures with US$0.995 billion, foreign currency interest rate swaps with US$0.661 billion, and margin account tradings with US$0.359 billion.