Mainland banks are rushing to offer accounts and other services in euros to companies and individuals, but the new money will not challenge the US dollar as the first choice for foreign-currency accounts.
The Industrial and Commercial Bank, the country's largest, announced that it would from January 1 offer a range of services in euros, including accounts, clearing, remittance, letters of credit, travellers cheques, loans and financing. More than 10 of its branches were prepared.
An official at one of its branches in Beijing said European currencies ranked fourth, behind US and Hong Kong dollars and yen, as the choice for individuals to open foreign-currency accounts.
'I expect the proportion in euros to increase because it will be stronger than individual European currencies,' she said.
'Our customers are sophisticated in choosing currencies. But the US dollar will remain No 1 for the time being. It is the currency people are most familiar with.' A listing at the bank of comparative rates for the currencies available showed that for a three-month deposit, sterling was listed the most attractive, with 5.32 per cent, followed by the HK dollar with 3.8 per cent, the US dollar with 3.74 per cent, yuan with 2.79 per cent, deutschemark with 2.56 per cent and yen last with 0.019.
The central bank argues that, despite six successive cuts, the yuan still offered the best real rate because inflation in the mainland is negative.
The Construction Bank will also offer euro accounts.
