Central Bank of China

PRESS RELEASE Release Date: October 8, 2003




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Overview of offshore banking units (August 2003)

At the end of August, 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$56.636 billion at the end of August, 2003; increased by US$9.29 billion or 19.62%compared with the same month of the previous year. Domestic bank OBUs accounted for US$38.538 billion or 68%of these combined assets, and foreign bank OBUs accounted for US$18.098 billion or 32%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 48%of total liabilities, deposits by financial institutions situated locally for 11%, those by financial institutions located overseas for 5%, and inter-OBU deposits for 3%. The other sources of funds included deposits by non-financial institutions, accounting for 29%of total liabilities, and other liabilities plus the equity of head office for 4%. In terms of the area of origin, Asia accounted for 68%, followed by America with 21%, Europe with 7%, and other areas with 4%.

The main uses of funds were due from related offices and deposits with financial institutions which together accounted for 56%of total assets. A further breakdown shows 37%was due from related offices, 13%was deposited overseas, 3%with other domestic financial institutions and 3%with domestic OBUs. The other uses of funds included loans, accounting for 28%of total assets, security investments for 12%, and other assets for 4%. Asia was the main destination for funds, accounting for 60%, followed by America with 25%, Europe with 12%, and other areas with 3%.

The total value of all outstanding loans made by OBUs at the end of August, 2003, amounted to US$15.604 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$7.60 billion, followed by short-term loans extended to oversea debtors with US$5.068 billion, and loans extended to local debtors with US$2.936 billion. The volume of export related banking business of all OBUs in August was US$5.116 billion. Of this amount, export collection plus export remittance accounted for US$3.761 billion, and export negotiation for US$1.355 billion.

The turnover of foreign exchange trading by all OBUs in August was US$5.310 billion. Of this amount, spot transactions accounted for US$4.368 billion, followed by foreign exchange swaps with US$0.565 billion, and outright forwards with US$0.377 billion.

The turnover of trading other derivative products by all OBUs in August was US$6.419 billion. Of this amount, options accounted for US$3.536 billion, followed by financial futures with US$1.488 billion, margin account tradings with US$0.733 billion, foreign currency interest rate swaps with US$0.632 billion, and foreign currency forward rate agreements with US$0.03 billion.