The direct losses of Chinese banks from the U.S. subprime crisis were not especially large in the amount, Jiang Jianqing, chairman of the Industrial and Commercial Bank of China (ICBC), said Saturday.
"Overseas analysts had overestimated the impact of the U.S. subprime crisis on China's banking sector," Jiang said on the sidelines of 2008 conference of Boao Forum for Asia, which kicked off in south China's Hainan Province.
The ICBC, China's largest commercial lender, suffered a loss of 1.2 billion U.S. dollars from the crisis, Jiang said during a panel discussion on financial reform and innovation, one of the sessions during the conference portion of the forum.
Bank of China, the largest holder of subprime-related assets in the country, said last month in its annual report that its investment in subprime asset-backed securities was 4.99 billion U.S. dollars in 2007.
The bank said it had set aside 1.295 billion U.S. dollars in provisions to cover a possible decrease in value of subprime securities. However, some analysts had predicted the bank's losses could amount to 3 billion U.S. dollars.
China Construction Bank, the country's major property lender, said on Friday in its annual report it had made provisions of 630 million U.S. dollars for possible losses in its 980 million dollar U.S. subprime investments.
However, Jiang believed the U.S. crisis, which was slowing the world economy, would hit Chinese exporters, especially mid-sized and small enterprises. It might also add to the country's inflationary pressure due to rising asset prices.
He also said one reason behind the American credit crisis was that U.S. bonds had attracted too many investors. He suggested the bond market of emerging economies should be developed to offer more choices for global bond investors.
Liu Mingkang, China Banking Regulatory Commission chairman, said at the same panel discussion the country would learn lessons from the U.S. crisis, but it would stick to the strategy of further opening up its banking sector.
He also said banking regulators worldwide should work together to guard against financial risks and prevent their spread.
(Xinhua News Agency April 13, 2008)
