UPDATE 1-China banks should buy overseas financial stakes-Zhou

(Adds background, comments)

By Victoria Bi

XIAMEN, China, Sept 8 (Reuters) - China's commercial banks should buy or take stakes in foreign financial institutions to help the nation's overseas investment drive, central bank governor Zhou Xiaochuan said on Saturday.

Flush with cash, Beijing is urging its top firms to invest abroad to secure natural resources, gain international experience and broaden China's investment base. At the same time, officials are increasingly resisting foreign purchases of top Chinese companies.

"Financial institutions are playing an important role in supporting overseas investments, but it is still not enough, and especially the balance between 'inviting in' and 'going out' is uneven," Zhou told an investment and trade forum in the southern coastal city of Xiamen.

Zhou said Chinese banks should set up branches abroad and lend more money to Chinese firms and projects overseas.

China's big banks have reported bumper profits thanks to the economy's strong growth and state bailouts over the past decade totalling as much as $500 billion.

They are also learning from big foreign banks which were invited to buy strategic stakes prior to their stock listings.

China's banks are venturing slowly onto the world stage.

Industrial and Commercial Bank of China (1398.HK), the world's largest lender by market value, agreed last month to pay $583 million for 80 percent of Macau's Seng Heng Bank after taking a 90 percent stake in December in PT Bank Halim Indonesia.

ICBC Chairman Jiang Jianqing told Reuters in May he wanted to develop a presence in the Middle East and Latin America and set up shop in countries that enjoyed close economic ties with China.

China Construction Bank (0939.HK) last year bought the Hong Kong and Macau operations of Bank of America (BAC.N), which owns 8.5 percent of the Chinese lender, and Chairman Guo Shuqing has said he is open to overseas acquisitions.

And Bank of China (3988.HK) bought Singapore Aircraft Leasing Enterprise Pte. Ltd. for $965 million last December, while China Development Bank, which lends at the direction of the government, is investing as much as 9.8 billion euros ($13.6 billion) in British bank Barclays Plc (BARC.L).

China's embryonic state overseas investment agency is also dipping its toes in the water: it bought a $3 billion stake in private equity firm Blackstone Group (BX.N) ahead of its initial public offering in New York in June.

But China has become more choosy about inbound acquisitions.

Beijing has forbidden foreign steel firms from buying controlling stakes in major domestic firms and has blocked a series of high-profile foreign investments.

U.S. private equity group Carlyle [CYL.UL] has been waiting for nearly two years for approval to buy into Xugong Group Construction Machinery Co, China's largest construction machinery maker.

But securities regulator Shang Fulin reaffirmed on Thursday that China would resume licensing foreign brokerages to form joint ventures with local securities houses now that the latter, like China's banks, have been nursed back to profit.

((Writing by Lucy Hornby; editing by Louise Heavens; lucy.hornby@reuters.com; Reuters Messaging: lucy.hornby.reuters.com@reuters.net; +86 10 6598-1269)) Keywords: CHINA BANKS/

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