Shanghai Booms Financially in First Half of 2002

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Last updated at: (Beijing Time) Tuesday, July 23, 2002

Shanghai Booms Financially in First Half of 2002

Chinese-funded financial institutes in Shanghai, China's industrial and financial center, cheered their success in the first six months of this year.

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Chinese-funded financial institutes in Shanghai, China's industrial and financial center, cheered their success in the first six months of this year.

Latest statistics show that outstanding loans held by Chinese-funded institutions totaled 1.073 trillion yuan (129.33 billion USdollars) and the balance of loans reached 804.17 billion yuan (96.88 billion US dollars) by the end of June, up 23.5 percent and 23.4 percent respectively from the same period last year.

Outstanding deposits in foreign currencies held by Chinese-funded financial institutes rose by 8.2 percent to 18.028 billion US dollars by the end of June compared with the beginning of the year.

Shanghai-based foreign financial institutes also reported steady growth in deposits and loans in the first six months to June.

All this occurred in an upbeat climate of competitive cooperation with both Chinese and foreign financial institutions seeking common development, banking sources said.

Moreover, statistics show that from January to June, transactions on the Shanghai-based national interbank lending market rocketed to 5.0977 trillion yuan (614.18 billion US dollars), outstripping last year's total. The foreign exchange trading volume totaled 38.47 billion US dollars, with the daily trading volume reaching 321 million US dollars, a rise of 29 percent on a yearly basis, according to the Shanghai-based China Foreign Exchange Trade System.

Sources with the People's Bank of China Shanghai Branch said that Shanghai's financial sector was expected to enjoy more healthy growth in the second half of the year as the world economy began to recover. This would help the metropolitan to introduce more foreign funds and expand exports. The growth trend in the Chinese economy was cited as a favorable factor that would increase domestic demand and economic development in Shanghai.

With the local industrial sector due to keep steady and rising exports in the next six months, Shanghai's total investment is expected to reach 210 billion yuan ( 25.3 billion US dollars) and its economy to maintain a two-digit growth rate in 2002.

But bank sources also warned Shanghai's financial institutes to watch for problems such as a low loan interest rate that led to a drop in profits, unitary loan structure and intensified competition brought about by the presence of foreign financial institutions.

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