PROHIBITING foreign banks in China from the yuan business has resulted in a less-than-complete relationship between banks and their foreign clients on the mainland, according a banker.
Robert Kerneis, deputy general manager of Societe Generale, said foreign banks set the foundations for a firm's initial entry into China but then had no further role in the development of companies they helped set up.
The reason: these firms conducted their local business in yuan.
''We cannot deal in yuan, only the hard currencies. So, what we can do is to help foreign firms settle in and get them started. We cannot follow them once they begin operations because they will then be dealing in yuan.
''We would like to follow their developments all the way but we cannot, especially if their products are marketed in China and are not for export. It's a pity,'' Mr Kerneis said.
That does not mean the bank's relationship with clients stops once the China operations start.
