Many in South Korea using the Chinese yuan

Global Business

Chinese banks are growing rapidly, especially in South Korea. They now rank second in asset weights of foreign banks in South Korea, just after the United States.

CCTV’s U-Jean Jung reported from Seoul.

Many in South Korea using the Chinese yuan

Many in South Korea using the Chinese yuan

Chinese banks are growing rapidly, especially in South Korea. They now rank second in asset weights of foreign banks in South Korea, just after the United States. CCTV's U-Jean Jung reported from Seoul.

Many South Koreans are choosing Chinese banks to avoid low interest rates in the country.

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.

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 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.