A top official of the State Administration of Foreign Exchange (SAFE) yesterday called on overseas banks to cooperate closely in the implementation of the country's macroeconomic policy as they expand their business in the country.

At a forum to mark the first anniversary of overseas banks' local incorporation, Deng Xianhong, SAFE's deputy director, praised the contribution of overseas banks to the development of China's financial markets in the past year.

"Overseas banks are playing an increasingly important role in accelerating the reforms in China's banking industry," said Deng. "They have made great contributions to strengthen the overall competitiveness of China's banking industry and in bringing the industry more in line with international practices."

Overseas banks in China have witnessed great expansion in the past year with the local incorporation of 27 of them. A total of 92 overseas banks have established branches and an additional 191 overseas financial institutions have opened offices.

Till October, the total assets of all overseas banks rose 41 percent from a year earlier, and the aggregate outstanding loan increased by 58 percent.

As the presence of overseas financial institutions is expanding rapidly on the mainland, their influence on the macroeconomy is also becoming more significant.

Deng said that while overseas banks are focusing on business expansion, they should also bear in mind that the successful implementation of the government's macroeconomic policy needs the full cooperation of overseas banks.

(China Daily, February 27, 2008)