The Globe and Mail, Steven Chase, 21 January 2007
China wants Canadian banks to abandon their timid approach to the Asian market of 1.3 billion consumers and instead step up investment there, federal Finance Minister Jim Flaherty said Sunday, passing on advice that he underlined should be heeded.
“One of the things I heard from officials in China is that our financial services sector — particularly our banks — have probably been too conservative, not aggressive enough, in the China market,” Mr. Flaherty said during a conference call with reporters at the end of a week-long trip to Beijing and Shanghai.
He contrasted the banks' record in China with two big Canadian insurance companies, Manulife Financial Corp. and Sun Life Financial Inc., that have a relatively big presence in the populous Asian country.
“Our two insurance companies that are very active here — namely Manulife and Sun Life — have been fairly aggressive and have ... quite substantial market participation,” Mr. Flaherty said.
Although he was conveying the advice of Beijing officials, the Finance Minister suggested that he agreed with the comments.
“I think there may be something to be learned there, from the comments of the [Chinese] officials, that our banks perhaps ought to be more aggressive in this marketplace.”
Mr. Flaherty's visit was chiefly to help rebuild ties after a recent quarrel between the Harper government and Beijing over human rights, one that has significantly chilled Sino-Canadian relations.
But the Finance Minister was also there to ensure the recent Ottawa-Beijing frostiness hadn't hurt prospects for Canadian financial institutions and insurance companies in China, where a relatively untapped financial services market of more than $1-trillion (U.S.) in banked personal savings is ripe for development.
Mr. Flaherty met with China's Finance Minister Jin Renqing, governor of the Bank of China Zhou Xiaochuan and top financial services regulators. He said China's call for more Canadian banking investment singled out initial public offerings of Chinese banks as a prime example.
“There have been some IPOs, as you know, of Chinese banks in the past year and they have been very successful. The comment was made to me that perhaps the Canadian banks should be less conservative in participating in some of those large IPOs,” Mr. Flaherty said.
He noted that other foreign banks have made greater strides in China. “Certainly some banks from some other countries have been more aggressive here than Canadian banks have been.”
Canadian banks, including Bank of Nova Scotia and Bank of Montreal, are expanding in China.
Scotiabank, Canada's third-largest lender by assets, and International Finance Corp. may be close to acquiring a 25-per-cent stake in China's Dalian City Commercial Bank for $321.1-million, Reuters reported last week.
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.
Mr. Flaherty's trip took place as China grants foreigners even more access to its banking and financial services markets, under a deal it struck when it joined the World Trade Organization five years ago.
China has been gradually opening its bank and financial services market to foreigners since 2001. It was supposed to enact the final set of liberalization moves on Dec. 11, 2006, but detailed rules on these last measures have yet to be published, Canadian banks say.
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China wants Canadian banks to abandon their timid approach to the Asian market of 1.3 billion consumers and instead step up investment there, federal Finance Minister Jim Flaherty said Sunday, passing on advice that he underlined should be heeded.
“One of the things I heard from officials in China is that our financial services sector — particularly our banks — have probably been too conservative, not aggressive enough, in the China market,” Mr. Flaherty said during a conference call with reporters at the end of a week-long trip to Beijing and Shanghai.
He contrasted the banks' record in China with two big Canadian insurance companies, Manulife Financial Corp. and Sun Life Financial Inc., that have a relatively big presence in the populous Asian country.
“Our two insurance companies that are very active here — namely Manulife and Sun Life — have been fairly aggressive and have ... quite substantial market participation,” Mr. Flaherty said.
Although he was conveying the advice of Beijing officials, the Finance Minister suggested that he agreed with the comments.
“I think there may be something to be learned there, from the comments of the [Chinese] officials, that our banks perhaps ought to be more aggressive in this marketplace.”
Mr. Flaherty's visit was chiefly to help rebuild ties after a recent quarrel between the Harper government and Beijing over human rights, one that has significantly chilled Sino-Canadian relations.
But the Finance Minister was also there to ensure the recent Ottawa-Beijing frostiness hadn't hurt prospects for Canadian financial institutions and insurance companies in China, where a relatively untapped financial services market of more than $1-trillion (U.S.) in banked personal savings is ripe for development.
Mr. Flaherty met with China's Finance Minister Jin Renqing, governor of the Bank of China Zhou Xiaochuan and top financial services regulators. He said China's call for more Canadian banking investment singled out initial public offerings of Chinese banks as a prime example.
“There have been some IPOs, as you know, of Chinese banks in the past year and they have been very successful. The comment was made to me that perhaps the Canadian banks should be less conservative in participating in some of those large IPOs,” Mr. Flaherty said.
He noted that other foreign banks have made greater strides in China. “Certainly some banks from some other countries have been more aggressive here than Canadian banks have been.”
Canadian banks, including Bank of Nova Scotia and Bank of Montreal, are expanding in China.
Scotiabank, Canada's third-largest lender by assets, and International Finance Corp. may be close to acquiring a 25-per-cent stake in China's Dalian City Commercial Bank for $321.1-million, Reuters reported last week.
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.
Mr. Flaherty's trip took place as China grants foreigners even more access to its banking and financial services markets, under a deal it struck when it joined the World Trade Organization five years ago.
China has been gradually opening its bank and financial services market to foreigners since 2001. It was supposed to enact the final set of liberalization moves on Dec. 11, 2006, but detailed rules on these last measures have yet to be published, Canadian banks say.
