Call sounds for China to lend firms hand to expand

“There are greater opportunities for expansion as the currency undergoes rapid internationalization,” Xiao Gang, chairman of the Bank of China, told China Daily in an exclusive interview.

“That requires commercial banks to provide more credible and convenient services overseas to satisfy client demand.”

The financial sector should rapidly embrace internationalization, as it lags behind industrial companies, Xiao said in Yokohama, Japan, during the two-day China-Japan Entrepreneurs Exchange Meeting of the Boao Forum for Asia, which ended on Friday.

China's global investment hit US$437.3 billion and was spread across 178 countries and regions by the end of last year.

Zhang Jianping, a researcher from the Institute for International Economic Research affiliated to the National Development and Reform Commission, said last week that the pace of investment will continue to accelerate due to swelling foreign reserves and the expanding outreach of companies.

The first five months of the year saw investment overseas increase by 40.2 percent year-on-year to US$28.52 billion, according to the Ministry of Commerce.

Xiao said yuan-denominated settlement in cross-border trade has reduced foreign exchange risks for Chinese companies and accelerated their development in foreign markets.

The yuan's internationalization means Chinese companies and banks have a choice to select their settlement and investment currency, making it easier to lower financing costs.

“Choosing growth areas is vital to the success of bank internationalization. As China's trade and investment with the rest of the world is increasingly diverse, banks must further expand their global networks,” Xiao wrote earlier in a commentary on China Daily.

Major Chinese lenders are focusing on the global market.

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