SHANGHAI--The observation deck of the 492-meter-tall Shanghai World Financial Center was crowded with locals and tourists on its opening day Saturday.
They are not the only ones interested in the world's tallest building, built by Japan's Mori Building Co.--Japanese megabanks also are eyeing it as a base for expanding their efforts to cash in on China's booming economy.
Twenty-five companies have rented office space in the 101-story skyscraper, including Sumitomo Mitsui Banking Corp., which has rented the 11th through 13th floors and part of the 14th. Its 600 employees--an unusually large number for a branch office--moved in in June. The branch plans to add about 200 more staff.
Meanwhile, Mizuho Corporate Bank's local subsidiary is scheduled to move in from a nearby building in October.
Along with the current influx of Japanese companies into China, Japanese banks are seeing a surge of lending in China--outstanding loans as of the end of March totaled 23.2 billion dollars, about 2.3 times more than five years ago.
Even though China's growth has slowed since the authorities adopted a tighter monetary policy, it continues to post double-digit annual growth, meaning the demand for funds remains high and banks are attracted by the prospects of high profits.
In China, in an effort to protect state-owned banks, authorities set upper and lower limits for interest rates both on loans and deposits.
Currently, interest rates for loans must be at least 7.47 percent while those for deposits must be no more than 4.14 percent, meaning that banks are ensured a loan-deposit profit margin of more than 3 percent. The margin can be greater if banks procure funds at a lower rate by issuing bonds in Japan. In the Japanese market, the Mizuho group, for example, reported a loan-deposit margin of 1.46 percent for the April-June quarter.
"Banks probably find China a more comfortable place to do business than Japan," an official from a Japanese firm said.
(Daily Yomiuri)
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