Citigroup has signed an MOU with the Bank of China and China Merchants Bank to cooperate in supporting their clients’ investment and projects related to the Belt and Road Initiative.
The American banking giant agreed to work with each Chinese lender to explore potential avenues for cooperation.
These include: financing, financial product development, agency and trust, trade and capital markets, according to a statement.
The focus will be on infrastructure, including: railways, power, energy, telecoms and environment projects.
Oil and gas, agricultural and sustainable development project involving education and small-to-medium enterprises are also tipped as areas for potential collaboration.
It is expected that the Middle East, Eastern Europe and Southeast Asia are three key regions in the US lender’s sights for collaboration with the Chinese banks.
The New York-based lender is one of a handful of global lenders highlighting its cross-border prowess to capitalise on the China-led infrastructure and trade initiative.
”We have a long track record of supporting our Chinese banking clients around the world,” said Christine Lam, chief executive with Citigroup China.
She highlighted Citi’s role as a global coordinator on Bank of China’s Belt and Road bonds, issued in June 2015, April 2017 and April 2018. The trio of issuances raised USD 10bn combined.
To date, most Belt and Road projects have been financed by Beijing-backed policy and commercial lenders such as China Development Bank and ICBC.
China’s investments in countries including in the Belt and Road Initiative last year. Overall, Chinese outbound direct investment declined 32% YoY according to a recent report from professional services firm EY. The decline came amid strict domestic regulations of cross-border investments.