Financial crisis hurting Chinese exports- ICBC chairman

NEW YORK, Oct 16 (Reuters) - Industrial & Commercial Bank of China's (601398.SS) President and chairman Dr. Jiang Jianqing said on Thursday that the current global financial crisis is driving down demand for exports from China, threatening that country's economy.

In New York to mark the opening of ICBC's first branch in the United States, Jiang said China's export-driven economy was already beginning to suffer from lower exports, particularly in it steel, coal and power industries.

"The signs of a slowdown have already appeared in small and medium size enterprises in the coastal regions," Jiang told a conference at Columbia University through an interpreter.

But Jiang told the audience that his bank, which he said was the largest commercial bank in China with $1.4 trillion in assets, was insulated from the crisis roiling worldwide financial markets because of minimal exposure to toxic U.S. mortgage-backed assets.

"I don't think China's banking industry will emerge completely unscathed from the crisis because our economies are so closely connected," he noted.

Jiang attended International Monetary Fund meetings earlier in the week, and is in New York, where he met with Wall Street chief executives and government officials.

He predicted the U.S. banking system would emerge from the crisis more heavily regulated, with leverage levels curtailed.

"I am quite optimistic about the U.S. economy," Jiang said. The bank chose the timing of the opening of its branch office, he said, "to reflect our confidence the U.S. and the world can recover from the current crisis."

Jiang pointed out the similarities between China's emergence from its own severe banking crisis, when in 2003, its government-owned banks accelerated the privatization of banks and began shedding bad loans. In the United States, the government has "partially nationalized" privately held banks, he said.

"We started out from different places but ended up at the same destination," Jiang said.

Jiang claimed that with $1 trillion in deposits, ICBC has a larger deposit base than either JP Morgan Chase (JPM.N) or Credit Suisse (CSGN.VX).

"So you can see we have a lot of cash on hand when liquidity is a question of life or death," Jiang said.

But to weather the global crisis, China has to foster internal consumption, Jiang said, adding that the Chinese government will have to ramp up social programs such as social security, health care and education to reach that goal.

"We can stimulate internal demand," Jiang said. "Our industrialization has just begun."

(Reporting by Phil Wahba; Editing by Bernard Orr)