China Banking Association Flags No Limit on Capital Outflows to One Belt One Road
The peak body for China’s banking sector has flagged an absence of curbs on investment in projects related to the much-vaunted One Belt One Road initiative.
Fan Guangwei, vice head of the China Banking Association said that it would issue the “Recommendation on the Chinese Banking Sector Providing Services to ‘One Belt One Road,'” to its 620 members both domestically and overseas, in order to guide the financing of projects that fall under the initiative.
Speaking at a press conference held at the State Council Information Office Fan said that banking sector financial institutions in China were all actively researching and formulating plans and implementation opinions for One Belt One Road in order to improve cross-border financial services directed at the initiative.
CBA is also preparing the establishment of a representative office in London as well as leading preparations for the establishment of an Asian financial cooperative association.
Fan said that CBA would not impose any restrictions on investment in One Belt One Road projects, and that the objectives of any measures introduced would be to restrict offshore real estate speculation or high-risk overseas acquisitions.
“We have already basically achieved a balance on capital outflow restrictions and support for One Belt One Road,” said Fan.
Official data indicates data indicates that as of the end of last year 9 Chinese banks had established 62 first-tier entities in 26 One Belt One Road participating nations, including 18 subsidiary banks, 35 branch banks and 9 representative offices.
Conversely, 54 commercial banks from 20 of the One Belt One Road participating nations had reciprocated the favour with the establishment of 6 subsidiary banks, 20 branch banks, 40 representative offices and 1 financial company.
CBA data indicates that in 2016 alone China had made direct investments in One Belt One Road nations of USD$14.5 billion, as well as overseas contracts worth $126 billion.
China’s big state-owned banks are taking a leading role in the channelling of Chinese money to the One Belt One Road initiative.
Bank of China, the big-state-owned lender with the greatest overseas reach, had provided capital support of $100 billion to One Belt One Road countries of a total of 420 key projects, while ICBC, China’s biggest bank, is expected to be making total investments of $337.2 billion in 412 undertakings.