Chinese banks urged to invest overseas

10 September 2007

Chinese banks are being urged by the governor of the central bank to invest in foreign companies to help the nation's overseas investments.

Zhou Xiaochuan said that Chinese commercial banks should be putting money into foreign markets to secure natural resources, gain international experience, and widen China's investment base, according to Reuters.

"Financial institutions are playing an important role in supporting overseas investments, but it is still not enough, and especially the balance between 'inviting in' and 'going out' is uneven," said Mr Zhou.

Last month, Industrial and Commercial Bank of China (ICBC) agreed to pay $583 million for an 80 per cent share of Macau's Seng Heng Bank and China is also beginning to invest abroad.

China's state overseas investment agency recently bought a $3 billion stake in Blackstone Group, the private-equity firm.

But China has not welcomed foreign investment into its own industries: Carlyle, the US private equity group, has been waiting the approval of a deal to buy into Xugong Group Construction Machinery Co for over two years.

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