China’s Top Private Bank In Pakistan

[GUNNER]

Premier Wen To launch China’s top private bank branch in Pakistan


BEIJING, Dec 15 (APP): Chinese Premier Wen Jiabao is going to open a branch of Industrial and Commercial Bank of China (ICBC), the top private bank of China during his visit to Pakistan starting from Friday.

The ICBC is the world’s biggest bank by capitalization. According to an article from a Chinese scholar published here in an English daily ahead of Premier Wen visit to all weather ally, by the end of this year, the trade between China and Pakistan will be worth $7 billion, with an annual growth rate of 29 percent.

The growth rate of trade between the two countries is expected to grow by over 30 percent over the next five years and the trade volume could increase to $18 billion.

But the level of economic cooperation does not reflect the close and lasting political and military ties between the two countries, writes Li Xiguang, a professor of Tsinghua University, Beijing.

“We are all-weather political allies. Since September 2008, Pakistani President Zardari came to China almost every four month, beating any heads of state in terms of frequency of visiting China,” said Pakistan’s ambassador to China, Massood Khan, “China has a very positive image in Pakistan. We support China’s policy on Tibet, Xinjiang and human rights,” said Khan.

“But we also need to have an all-weather highway between our two countries,” he said. Two years ago, Chinese and Pakistani engineers and road builders started extending the width of the Karakorum Highway from 10 meters to 30 meters.

Chinese engineers have completed a feasibility study for the building of a railroad and an oil pipeline to link Kashi in Xinjiang and Gawadar in Pakistan’s Balochistan Province at the mouth of Gulf.

Sixty percent of China’s imported oil comes from the Middle East and 80 percent of that transported to China through the Straits of Malacca.

With the construction of the Kashi-Gawadar railroad and oil pipeline, Gawadar, a warm-water and deep-sea port, will handle most of the oil tankers to China.

It will provide China with the shortest possible route to the oil rich Middle East, replacing the dangerous maritime route through the South China Sea, East China Sea and the Yellow Sea.

“Through Gawadar, oil will come to China and goods will go to West Asia and the Gulf, bringing China closer to countries such as Turkey and Iran,” Khan said. “The highway will stimulate the economic growth in Pakistan. With the recovery of the legendary Silk Roads through Pakistan, Pakistan will become an economic hub once more.”

“If China joins Pakistan in building its desperately-needed power stations, Pakistani people will feel the warmth and brotherhood every night when they turn on the light in their home,” Khan said.

“In the streets of Pakistan, it seems that everyone knows Wen is coming,” said Khan.

 

[GUNNER]

Analysis: Banking in Pakistan attracts China’s attention


KARACHI: The largest and most profitable bank in the world is seeking to enter the Pakistani financial market, even as American and European financial institutions scale back their presence.

The move by the Industrial and Commercial Bank of China (ICBC) – the largest bank by market capitalisation – to seek a Pakistani banking license is likely to have a significant impact on the local financial sector.

Earlier this month, State Bank governor Shahid Kardar announced that the central bank was hoping to grant a banking license to ICBC before the December 17 visit by Chinese Prime Minister Wen Jiabao.

Jiabao is touring several countries as part of a push by the Chinese government to expand the presence of the Chinese financial sector abroad.

Banking sector: expect mergers and acquisitions

The Chinese financial behemoth has a habit of opening up branches in a country before acquiring one of the banks. ICBC Chairman Jiang Jianqing has already stated that his bank plans further acquisitions as part of their strategy to expand their footprint abroad.

There are several small banks in Pakistan that, although not formally up for sale, may welcome an acquisition bid by a strong Chinese financial institution. As many as a dozen banks are currently non-compliant with the central bank’s regulations on minimum paid-up capital requirement, a measure of a bank’s financial strength. Foreign investment, even an outright buyout, is likely to be welcomed by them.

The Chinese wave

ICBC’s expansion abroad has largely been a response to the rapidly expanding Chinese investments globally. In order to stay competitive, Chinese banks have to offer their customers a global presence, or else risk losing their business to American or European counterparts.

It seems natural, then, for Chinese banks to set up in Pakistan where Chinese firms, who have an established relationship with these banks, have been investing significant amounts of capital in recent years.

Chinese firms also tend to be far less sensitive to political risk, evidenced by the presence of around 10,000 Chinese nationals presently in Pakistan. This stands in sharp contrast to American and European firms, which tend to view even unrelated political incidents as a threat to their business.


Published in The Express Tribune, December 15th, 2010.



Analysis: Banking in Pakistan attracts China?s attention – The Express Tribune

 

[mughaljee]

China always wellcome.

 

[somebozo]

Im sure they will soon get fed up of our "borrow and run" elites.!