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People's Daily Online>>China Business

Regulator warns banks of global risks

(People's Daily)

16:01, November 17, 2011

Edited and translated by People's Daily Online

Beijing, Nov.17 (People's Daily Online) --While Chinese banks are supporting Chinese enterprises to go global, they must cautiously weigh risks, carefully study the orientations of the industrial policies of destinations for investment, identify possibly risky elements, carefully make reserve plans for risks, be highly aware of risks and keep away from high-leverage financial derivatives and excessively-innovative businesses, said Yan Qingmin, assistant to the chairman of the China Banking Regulatory Commission, at the China Overseas Investment Summit 2011 held on Nov. 16.

They must prioritize businesses such as annexation loans, international trade financing and letter-type credit guarantee while offering full and comprehensive financial services to help Chinese enterprises as they expand globally. Banks must also focus on supporting the strategic investment projects that will sustain China's future economic growth.

While Chinese banks are supporting the efforts of Chinese firms to go global, they must focus on supporting strategic investment projects that will sustain China's future economic growth and prioritize projects that will support the development of the emerging strategic industries, such as the new-generation information technology, energy conservation, environmental protection, new energy, biology and new materials.

Yan added that banks must not neglect projects that will deepen mutually beneficial cooperation in areas other than energy and resources, such as high technology and advanced manufacturing.

The banks should also allocate more resources to aid in the global expansion of leading Chinese enterprises with high brand awareness, high technological content and comparative advantage to set a strong example and motivate other enterprises to follow.

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