QCB set to enter China interbank bond market

19/04/2014 06:24 AST

The Qatar Central Bank will be allowed to enter China’s interbank bond market, according to a brief statement posted by the People’s Bank of China on its website yesterday.

The two central banks signed a deal yesterday, but the PBOC didn’t say when the agreement will come into effect.

Access to the market will allow the QCB to purchase Chinese bonds for its foreign-exchange reserves.

China has been moving gradually to open its financial system to foreign investment. Last year, the PBOC signed currency-swap agreements with the eurozone, UK and Indonesia, among others.

Official talks were held yesterday in Beijing between HE the QCB Governor Sheikh Abdullah bin Saud al-Thani and PBOC president Zhou Xiaochuan.

The session was attended on the Qatari side by Qatar’s Ambassador in Beijing Sultan bin Salmeen al-Mansouri and chief executive officers of a number of Qatari banks, the Qatar Financial Centre Regulatory Authority, the Qatar Financial Markets Authority, in addition to a number of QCB officials. The session was also attended by Yau Yudong, deputy director general of PBOC’s Monetary Policy Department along with a number of other officials.

Sheikh Abdullah underlined the importance of relations between Qatar and China, especially in the financial and investment sectors. He stressed the need to revitalise the memorandum of understanding signed in Doha in 2012 on the exchange of expertise and information in areas of concern to the central banks. Zhou spoke about his country’s focus on developing bilateral relations, especially in the financial and investment sectors.

Sheikh Abdullah and Zhou also signed the renewal of the agreement on the investment of the Chinese currency for two years. The agreement was first signed in Doha in 2012.

Qatar and China have signed a number of bilateral agreements including the agreement on trade signed in 1993; deal on the development and protection of investment between the two governments reached in 1999 and an agreement on the sale and purchase of LNG signed between Qatargas and CNOOC in 2008.

Trade exchange between the two countries reached $11.5bn in 2013, up 24.2% compared to 2012. Qatari exports accounted for $8.8bn of the total, while Qatari imports reached $2.7bn.

Liquefied natural gas dominates Qatari exports to China, while imports from China include construction raw materials and electronics.

Talks were also held yesterday between officials of Qatari national banks and their Chinese counterparts on the sidelines of the QCB governor’s visit. The talks were attended on the Qatari side by chief executive officers of QNB, Commercial Bank, International Islamic, Masraf Al Rayan and Doha Bank: Ali Ahmed al-Kuwari, Abdullah al-Raisi; Abdulbasit A al-Shaibei, Adel Mustafawi and Dr R Seetharaman respectively.

Mustafawi said in a statement to Qatar News Agency that the two sides discussed means of achieving co-operation between Qatari and Chinese banks and prospects of expanding areas of co-operation to include exchange of expertise between the two sides.

The Qatari side offered the possibility of opening branches of Qatari banks in China, especially Islamic banks and Chinese officials promised to study the offer, Mustafawi said.

QNA