Central Bank of China

PRESS RELEASE Release Date: February 11, 2004




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Overview of offshore banking units (December 2003)

At the end of December, 2003, there were 70 offshore banking units(OBUs)in operation. Of these, 41 belonged to domestic banks and 29 belonged to foreign banks. The combined assets of all OBUs amounted to US$64.548 billion at the end of December, 2003; increased by US$14.230 billion or 28.28%compared with the same month of the previous year. Domestic bank OBUs accounted for US$43.609 billion or 68%of these combined assets, and foreign bank OBUs accounted for US$20.939 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 69%of total liabilities. Of these, due to related offices accounted for 48%of total liabilities, deposits by financial institutions situated locally for 14%, those by financial institutions located overseas for 4%, and inter-OBU deposits for 3%. The other sources of funds included deposits by non-financial institutions, accounting for 25%of total liabilities, and other liabilities plus the equity of head office for 6%. In terms of the area of origin, Asia accounted for 70%, followed by America with 19%, Europe with 8%, and other areas with 3%.

The main uses of funds were due from related offices and deposits with financial institutions which together accounted for 58%of total assets. A further breakdown shows 39%was due from related offices, 12%was deposited overseas, 4%with other domestic financial institutions and 3%with domestic OBUs. The other uses of funds included loans, accounting for 24%of total assets, security investments for 12%, and other assets for 6%. Asia was the main destination for funds, accounting for 68%, followed by America with 19%, Europe with 11%, and other areas with 2%.

The total value of all outstanding loans made by OBUs at the end of December, 2003, amounted to US$15.801 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$7.419 billion, followed by short-term loans extended to oversea debtors with US$5.430 billion, and loans extended to local debtors with US$2.952 billion.

The volume of export related banking business of all OBUs in December was US$7.446 billion. Of this amount, export collection plus export remittance accounted for US$6.058 billion, and export negotiation for US$1.388 billion. The volume of import related banking business of all OBUs was US$5.681 billion.

The turnover of foreign exchange trading by all OBUs in December was US$5.525 billion. Of this amount, spot transactions accounted for US$3.851 billion, followed by foreign exchange swaps with US$0.894 billion, and outright forwards with US$0.780 billion.

The turnover of trading other derivative products by all OBUs in December was US$4.178 billion. Of this amount, options accounted for US$2.714 billion, followed by financial futures with US$0.825 billion, foreign currency interest rate swaps with US$0.636 billion, and margin account tradings with US$0.003 billion.