Chinese banks are growing rapidly in South Korea and now rank second in asset weights of foreign banks, after the United States. CCTV’s U-Jean Jung reported from Seoul.
Chinese yuan growing rapidly in South KoreaChinese banks are growing rapidly in South Korea and now rank second in asset weights of foreign banks, after the United States. CCTV's U-Jean Jung reported from Seoul.
According to the Bank of Korea, yuan-denominated deposits by residents in South Korea has surged dramatically. The yuan-denominated deposits in 2011 was $80 million, but now it has grown to almost $20 billion dollars.
Bank of China was the first Chinese bank to open a branch in Seoul 22 years ago. But Huang De, the Korea Executive Officer, said he’s seen explosive growth just in the last couple of years.
“Our asset size was only $1.7 billion at the end of 2010, but it grew to $18 billion in four years. Just between these few short years, this kind of investment has increased more than 10 fold,” Huang said.
To meet rising demand and growth, Bank of China is currently looking to purchase a building in Seoul’s financial center.
Mansoo Jee of the research fellow of Korea Institute of Finance said turning South Korea into an offshore yuan hub is crucial for China’s master plan to make its currency a global player.
“Until now, China has relied heavily on Hong Kong to internationalize the yuan. But South Korea is a very attractive country as it can help expand the usage of the yuan outside of China in a balanced manner in both trade and financial transactions,” Jee said.
With the recent signing of a free trade pact between Seoul and Beijing and the opening of the won-yuan direct trading market this month, a bright future lies ahead for Chinese banks in South Korea.