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Banks in Hong Kong will play a greater role in supporting closer economic integration of between Hong Kong and the mainland under the Closer Economic Partnership Agreement (CEPA) signed between the two sides recently, a local banker said.
Derek Wong, managing director of Dah Sing Bank, made the remarks Friday when speaking to an audience of Hong Kong businessmen during a luncheon organized by the Hong Kong General Chamber of Commerce.
Wong said, "The implications of CEPA are very positive, as Hong Kong banks such as Dah Sing Bank will be able to participate in the mainland market and serve our customers better - many of them have already been operating their manufacturing bases on the mainland."
With CEPA, banks in Hong Kong will be able to diversify in the longer term, as the current Hong Kong market is too small for existing players, he said.
Therefore, he said, those banks with total assets below 6 million US dollars will attempt to expand their balance sheet to the minimum threshold requirement in order to make inroads into the mainland.
Now under CEPA, the original 20 billion US dollar total asset requirement for setting up bank branches on the mainland has been lowered to 6 billion US dollars.
Foreign banks, currently not present in the Chinese mainland and Hong Kong, may be attracted to invest in Hong Kong banks with a vision to participate in the China market slightly earlier than the timetable allowed under the World Trade Organization, he predicted.
(Xinhua News Agency August 2, 2003)
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