Asia-Pac banks' China exposure rising: Fitch

THE China-related risks of Asia-Pacific banks are continuing to grow, even as the country's "shadow banking" system has grown to an unprecedented size, observed two unrelated reports released yesterday.

Rating agency Fitch Ratings noted that Asia-Pacific banks had accumulated about US$1.2 trillion of China-related exposure as at the end of last year, with Hong Kong accounting for the bulk of this - 34 per cent of system assets amounting to US$798 billion. Macau is next with 20 per cent, followed by Singapore (12 per cent) and Taiwan (7 per cent).

Concentration for larger countries is relatively low: Australia at 1.2 per cent and Japan, 0.6 per cent.

Fitch said: "Most exposure is trade-related, financing foreign companies' operations in China and Chinese entities' outbound expansion, the latter comprising predominantly state-ow…