Central Bank of China

PRESS RELEASE Release Date: March 8, 2004




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Overview of offshore banking units (January 2004)

At the end of January, 2004, 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$65.369 billion at the end of January, 2004; increased by US$14.617 billion or 28.80%compared with the same month of the previous year. Domestic bank OBUs accounted for US$43.436 billion or 66%of these combined assets, and foreign bank OBUs accounted for US$21.933 billion or 34%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 71%, followed by America with 18%, 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 57%of total assets. A further breakdown shows 41%was due from related offices, 10%was deposited overseas, 3%with other domestic financial institutions and 3%with domestic OBUs. The other uses of funds included loans, accounting for 25%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 18%, Europe with 12%, and other areas with 2%.

The total value of all outstanding loans made by OBUs at the end of January, 2004, amounted to US$16.246 billion, of which 80%was extended to oversea debtors, and 20%to local debtors. Of this amount, long-term loans extended to oversea debtors accounted for US$7.463 billion, followed by short-term loans extended to oversea debtors with US$5.605 billion, and loans extended to local debtors with US$3.178 billion.

The volume of export related banking business of all OBUs in January was US$5.658 billion. Of this amount, export collection plus export remittance accounted for US$4.331 billion, and export negotiation for US$1.327 billion. The volume of import related banking business of all OBUs was US$4.367 billion.

The turnover of foreign exchange trading by all OBUs in January was US$6.049 billion. Of this amount, spot transactions accounted for US$4.485 billion, followed by outright forwards with US$0.843 billion, and foreign exchange swaps with US$0.721 billion.

The turnover of trading other derivative products by all OBUs in January was US$5.872 billion. Of this amount, options accounted for US$4.319 billion, followed by foreign currency interest rate swaps with US$0.803 billion, financial futures with US$0.724 billion, credit derivatives with US$0.015 billion and margin account tradings with US$0.011 billion.