Ties That Bind - Bay Area Council Economic Institute

Bay Area-China Trade: Behind the Numbers
Strait. This in turn has helped expand the bank’s customer base of local trading companies, foreign
invested enterprises, foreign nationals and residents of Hong Kong, Macau and Taiwan. It
recently received Chinese government approval to conduct foreign currency transactions, including
renminbi, for business customers. Today Bank of the Orient has 160 employees
throughout its network, and assets of some $640 million.
For banks headquartered outside the region, the Bay Area offers a logical U.S. base from which
to develop their China business. The trade finance portfolio at First Bank, for example, is heavily
composed of local companies doing business in Hong Kong, China and Taiwan. Its Grant
Avenue office, in San Francisco’s Chinatown, deals actively with the Chinese community there.
While not on the scale of large banks, financing trade with China constitutes a significant part of
First Bank’s business in the Bay Area. Pasadena-based East-West Bank, the largest Chinese-
American bank in the country, has 10 of its 61 retail branches in the Bay Area, and offices in
Beijing and Hong Kong. While the bank’s retail clientele is heavily Chinese-American, its commercial
banking business is equally divided between Chinese and non-Chinese clients, with a
strong focus on trade finance between California and China. Michigan-based Comerica Bank,
which opened a representative office in Shanghai in 2006, is developing its China strategy, including
outreach to the Chinese-American and Chinese-owned business community, from the
Bay Area.
Greater China banks with Bay Area branches, such as Hong Kong’s Liu Chong Hing Bank
and Shanghai Commercial Bank, and Taiwan’s Chiao Tung Bank, also offer trade financing.
Liu Chong Hing Bank and Shanghai Commercial Bank are unusual in that they provide retail
banking services for a sizable number individual, high net worth Hong Kong expatriates who
maintain investments or properties in the Bay Area.
Remittance services are important both to Bay Area ethnic Chinese and to localities on the
mainland. As with other ethnic groups in the U.S., many Bay Area Chinese immigrants regularly
send money to their families in China. Although these remittances form an insignificant part of
the national balance of payments of China and the U.S., they can contribute considerably to the
economies of smaller towns and villages in the southern and coastal provinces where most of the
Bay Area’s Chinese population originated.
Since the early decades of the last century, locals have called southern China regions seeing the
largest remittance inflows “overseas Chinese counties.” Much if not most of the remittances
fund housing. Modern, multi-story western-style villas have replaced many of the traditional
farmhouses in these areas.
Little hard data on remittances to China either from the U.S. as a whole or the Bay Area in particular
exists, but studies of national remittance patterns indicate that most of the funds bypass
the banking sector, instead flowing through informal channels. Western Union estimates that as
much as half of remittances entering China pass through underground wire services or are physically
carried into the country.
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