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China's forex assets to prop up more M&A overseas
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China has accumulated at least 2 trillion U.S. dollars of foreign exchange asset over the past 30 years, which is expected to stimulate more mergers and acquisitions (M&A) overseas, top officials of major Chinese lenders said on Saturday.

Contrasting the fast-growing hoard held by both government and residents, China's fixed-assets due to overseas investment reached100 billion U.S. dollars by the end of last year, which is obviously disproportionate with the huge stockpile, said China Construction Bank (CCB) Chairman Guo Shuqing on Saturday.

Chinese banks are expected to stage more M&A abroad, also a challenge for them, said ICBC's chairman Jiang Jianqing on the ongoing China Economic Development forum.

Considering clients demand and risk dilution, Chinese banks are eager to go global, Guo said on the forum, stressing CCB sticks to localization, other than direct control of the banks.

He cautioned Chinese banks to be careful because of their lack of experience.

Compared with leading global banks, overseas performance is still weak in Chinese banks. Overseas assets account for only 3 percent of the total, while overseas profits take up 3.6 percent, Jiang Jianqing said.

He noted the Chinese banking sector has gradually strengthened its presence after going public and introducing strategic investors. globalization is a must-trend for them.

(Xinhua News Agency March 24, 2008)

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