Moody\'s Investors Service has today put on
review for upgrade the long-term ratings of various policy banks and
state-controlled commercial banks in China as well as the deposit ratings
of the subsidiary of one foreign bank.

The action follows Moody\'s decision to place on review for upgrade China\'s
A2 long-term foreign currency sovereign rating and the A2 ceiling for
foreign currency bank deposit ratings. Bank financial strength ratings
(BFSR), which range from E to D and reflect stand-alone credit quality,
remain unchanged.

\"For the policy banks, the review is in line with action on the sovereign
ratings, and reflects Moody\'s view that both will continue to receive
strong government support as they discharge their policy functions,\" says
May Yan, a Moody\'s Vice President/Senior Credit Officer. The banks
affected are China Development Bank and Export-Import Bank of China.

\"Although the government has recently initiated reforms to commercialize
the policy banks, state ownership in these entities is likely to remain
very high and they will likely be fully supported,\" adds Yan.

\"For the state-controlled commercial banks, their review reflects Moody\'s
recognition of the implicit support provided by the government, and which
ameliorates their generally weak financial fundamentals,\" adds Yan,
Moody\'s lead analyst for Chinese banks. Banks in this category are
Industrial and Commercial Bank of China (ICBC), Bank of China (BOC),
China Construction Bank and Agricultural Bank of China,

Moody\'s also believes the state-controlled commercial banks will continue
to receive high support in the next few years, even after their partial
listings as the government is likely to maintain majority control and
these banks are \"too important to fail.\"

In the case of the review of the foreign bank subsidiary, HSBC China\'s
deposit ratings are currently constrained by China\'s sovereign ceilings.
As a result, any changes in the sovereign ratings - now under review for
upgrade - would result in moves in HSBC\'s deposit rating. The bank\'s A2
deposit rating is currently a result of a D BFSR and a multi-notch
uplift, due in turn to strong implicit parental support.

Ratings on review for upgrade include:

Policy banks:

China Development Bank -- long-term foreign currency senior debt rating
of A2

Export-Import Bank of China -- long-term foreign currency senior debt
rating of A2

State-controlled commercial banks:

Industrial and Commercial Bank of China - long-term foreign currency bank
deposit rating of A2

Bank of China - long-term foreign currency bank deposit rating of A2

China Construction Bank - long-term foreign currency bank deposit rating
of A2

Agricultural Bank of China - long-term foreign currency bank deposit
rating of A2

Foreign bank subsidiaries:

HSBC Bank (China) Company -- long-term foreign and domestic currency bank
deposit ratings of A2