Japanese Banks Set to Resume Loans to China

Japanese banks are set to resume lending discreetly to China with the blessing of Japan’s Ministry of Finance, banking sources said Monday.

Japanese bankers said they had received signals recently indicating they would be able formally to resume lending to Beijing in February, seven months after loans by Japanese and most Western banks were cut off after a government crackdown on China’s democracy movement.

A loan of $30 million will be granted to one of the eight national Chinese import-export corporations in Beijing by a consortium of three Japanese banks, sources close to the banks said.

“The (Japanese) Ministry of Finance did not signal any dissatisfaction with the deal last week,” one source said.

The loan was being arranged by CCIC Finance, a Hong Kong-based joint-venture of U.S., Japanese and Chinese banks.

Some Japanese banks have already begun quietly contacting potential Chinese borrowers with noncommittal loan proposals, banking sources said. They have told Chinese borrowers the range of terms they can expect when lending resumes.

“It looks like a Grand Prix, they are almost at the starting line and are raring to go,” said one source.

The World Bank has hinted it will discuss resumption of loans to China at its February board meeting, and a senior delegation from Japanese banks is due in China the same month, Japanese bankers said.

Sources said Dai-ichi Kangyo Bank officials had made a special trip to see Hong Kong developer Hopewell Holdings’ infrastructure project in southern Guangdong province, a $1.53-billion ($12-billion Hong Kong) highway that will link Hong Kong, Canton and Macao.