Letters of credit (L/Cs) and other trade finance services will be a key focus for Australia's Westpac as it expands its presence in China.

The bank is one of several Australian financial institutions jockeying for positions in the burgeoning Chinese banking sector.

Roll out

Westpac has opened a branch in Shanghai, China's commercial heartland.

The bank already had a branch in Hong Kong and more recently opened a representative office in the Chinese capital, Beijing.

L/C emphasis

Trade finance will play a key role for the new bank. "We want to be known as the leading provider of export finance to Australian companies exporting to China," said Westpac's general manager for Asia, Jogan Rasanayakam.

"Working capital, L/Cs and all forms of trade finance are on offer from the branch," he explained.

Australian inroads

Other Australian banks making inroads in China include Commonwealth Bank, which in September 2004 bought an 11 per cent stake in Jinan City Commercial Bank, and followed that up with a deal in April 2005 to pay about US$100 million for 19.9 per cent of Hangzhou City Commercial Bank.

Meanwhile, ANZ - which has branches in Beijing and Shanghai - announced in November 2007 the US$325 million acquisition of a 19.9 per cent stake in Shanghai Rural Commercial Bank. In 2005, it bought a 20 per cent stake in Tianjin City Commercial Bank.

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