Scotiabank approved to trade in China

Scotiabank has got the go-ahead to trade in some Chinese stocks and bonds.

It's the first Canadian bank to be approved to trade by the China Securities Regulatory Commission, Rob Pitfield, executive vice-president of international banking, said in a statement Wednesday.

The approval will allow the bank to trade A shares denominated in renminbi, the Chinese currency, and treasury, corporate and commercial bonds listed on Chinese exchanges.

The bank also said it recently received permission from China's bank regulator to offer derivatives to foreign and Chinese companies, which will help clients manage risks in the booming Chinese market.

The approvals are not huge in financial terms, but "it's one more step forward as the Chinese market starts to open up," bank spokesman Frank Switzer said.

China is not a big part of Scotiabank's business.

At Oct. 31, it had $701 million in "cross-border exposure" to China, down from $813 million a year earlier. Its Chinese exposure, mostly trade-related, ranked sixth among Asian countries.

But the bank said it has been expanding its Chinese presence, announcing in January that it would be allowed to to convert its Shanghai representative office to a full branch.

• FROM JAN. 6, 2006: Scotiabank plans full-service branch in Shanghai

In 2004, the bank and a World Bank company, International Finance Corporation, agreed to buy up to 25 per cent of the shares of Xi'an City Commercial Bank.

Xi'an, the capital of Shaanxi province, is home to more than seven million people.