Wednesday, January 17, 2007

Flaherty 'Encouraging' Access for Canadian Banks in China

Bloomberg, Theophilos Argitis, 17 January 2007

Canadian Finance Minister Jim Flaherty is seeking better access for the nation's banks to the Chinese market during his trip to the Asian country this week, the finance department said.

The two countries can achieve mutual goals by "encouraging access and participation of Canadian financial institutions," the department said in an e-mailed statement today from Ottawa. Flaherty is scheduled to meet China's Finance Minister Jin Renqing, central bank governor Zhou Xiaochuan, and banking regulators during his seven-day trip to the country.

"China is an economic giant," Flaherty said in the statement. "Canada, on the other hand, is an emerging energy superpower, is a center of excellence in science and technology, and is a natural gateway to the largest market in the world."

Canadian banks including Bank of Nova Scotia and Bank of Montreal are expanding in China, Canada's second-biggest trade partner after the U.S. Bank of Nova Scotia, Canada's third- largest lender by assets, and the International Finance Corp. may be close to acquiring a 25 percent stake in China's Dalian City Commercial Bank for $321.1 million, Reuters reported yesterday. Scotiabank spokesman Frank Switzer declined to comment.

Toronto-based Scotiabank has been in China for 25 years, starting with a representative office in Beijing. Last year, the bank said it became the first Canadian lender eligible to trade yuan-denominated stocks and bonds. The bank bought a minority stake in Xi'an City Commercial Bank with the IFC in 2004.

Bank of Montreal, the fourth-biggest bank in Canada, opened its first Beijing branch in 1996, and plans to open a corporate banking branch in Shanghai.

Flaherty and Trade Minister David Emerson are in China this week seeking more Chinese investments in Canada's energy industry and other sectors of the world's eighth-biggest economy.