China CITIC Bank Corp Ltd and other subsidiaries of the State-owned CITIC Group Corp plan to support the country’s Belt and Road Initiative with combined investment and financing worth more than 700 billion yuan ($113 billion).
The mid-sized commercial lender will provide more than 400 billion yuan of that in financing to more than 200 projects in areas such as infrastructure, energy and agriculture, said Chang Zhenming, the bank’s chairman.
The Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives were proposed by President Xi Jinping in 2013 to improve the infrastructure connectivity along the trading routes.
Chang said: “For State-owned enterprises, supporting the Belt and Road Initiative is a chance to adapt to current international and domestic economic conditions and change our way of growth through restructuring.”
Yan Ning, head of strategy and planning at CITIC Group, said that to stabilize China’s economic growth, looking for overseas opportunities is a must for many companies as production levels hit a ceiling at home.
Yan said the economic initiatives will bring “a major adjustment to the opening-up of China”, encouraging more domestic companies to expand into developing countries.
CITIC Bank will set up a fund with initial capital of 20 billion yuan in the first phase to invest in urban infrastructure, rail transport and industrial investment projects in regions along the Belt and Road.
The fund is likely to increase to 100 billion yuan within five years, and attract total financing worth 1 trillion yuan.
Chang said the bank will make effective use of its CITIC Construction Co Ltd subsidiary, in its handling of projects as the company has already completed an impressive number of contracts in some countries along the routes, including Belarus, Kazakhstan and Uzbekistan.
The bank will also deepen its cooperation with other financial institutions closely associated with the initiatives, including the China-led Asian Infrastructure Investment Bank and the New Development Bank operated by the BRICS nations.