THE Bank of East Asia yesterday linked as a strategic partner with China UnionPay Co, becoming the first overseas lender to issue yuan-backed debit cards on the Chinese mainland.

The bank also plans to issue yuan credit cards on the mainland this year after gaining regulatory approval, Bank of East Asia chairman David Li said yesterday in Beijing .

BEA's yuan debits cards can be used on the mainland's 800,000 merchants with UnionPay point of sale machines, with UnionPay's designated merchants in 29 overseas countries and regions, and in UnionPay's automatic teller machines in 48 overseas countries and regions.

"We want to issue as many debit cards as possible," said Li. "I'd be disappointed if we don't issue more than 1 million debit cards by the end of this year."

While BEA is the first overseas bank to issue yuan-denominated debit cards, its rivals including HSBC and Standard Chartered Bank are also preparing to launch similar products.

BEA has set up a bank card data center in Shenzhen City in the southern Guangdong Province for the launch of the card, while Standard Chartered has set up its data center in Shanghai.

BEA said yesterday it will move its data center to Shanghai and begin operations here early next year. The original Shenzhen center will be used as a backup.

Su Ning, deputy governor of the People's Bank of China, said yesterday in Beijing that BEA's partnership with UnionPay "can help boost the cards innovation and services."

BEA promised to donate 5 yuan from each debit card issued this year for reconstruction in earthquake-hit Sichuan Province. The bank and its employees have donated 4.12 million yuan (US$592,848) to the disaster areas.

The bank was among the first batch of four overseas banks to set up local incorporation on the mainland in April last year. The others are HSBC, Standard Chartered and Citigroup.

BEA has set up 52 outlets on the Chinese mainland, including 16 branches and 35 sub-branches.