A latest report by Shanghai branch of the People's Bank of China records that foreign-funded financial institutions hold more foreign currencies denominated loan than their Chinese peers.

By the end of March, 2005, the balance of loan in terms of both yuan and foreign currencies granted by both Chinese and foreign financial institutions in Shanghai had reached nearly 1.57 trillion yuan, a year-on-year rise of 12.3 percent. The pace is 11.1 percentage points slower than the same period of last year. The increase of 63.3 billion yuan for the first quarter is 15.7 billion yuan less than that in the same period of last year.

The central bank's Shanghai branch has found that for the first quarter 48.1 billion yuan denominated loan had been added to Chinese financial institutions in Shanghai. The increase is 15.1 billion yuan less than the same period of last year.

For quarter 1, foreign financial institutions managed 4.55 billion yuan loan which was 5.54 billion yuan higher than the rise of the same quarter last year.

In terms of forex loan, by the end of March, Chinese financial institutions in Shanghai reported a balance of nearly 13.2 billion USD. That means a reduction of 450 million USD for the first quarter.

Foreign financial institutions there secured a balance of more than 13.8 billion USD for foreign currencies denominated loan. The first quarter saw an extra input of 1.326 billion USD.

By the end of March, foreign financial institutions had 165.9 billion USD of loan balance, or 10.6 percent of the loan market in Shanghai. Its 50 percent speed of upsurge is 36.5 percentage points faster than the average in Shanghai.

The central bank reminds Chinese commercial banks of the fact that foreign lenders in Shanghai will continue their expansion of credit with the implementation of China��s WTO commitment on openness of its financial sector.

It is concerned that Chinese financial institutions will lose their best clients if they continue to tighten their support for working capital of enterprises.

It asks for close watch on the contrast in credit structure in Chinese and foreign financial institutions.

By People's Daily Online