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Citi Perspectives for the Public Sector
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2015 – 2016
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and India, and remained in operation for a
millennium. The objectives of the New Silk Road
are also reminiscent of those of its predecessor.
For example, it offers the potential to boost
growth in China by encouraging and facilitating
trade with Chinese counterparties, but by
fueling growth in the countries connected
to the New Silk Road, it promotes economic
sustainability through a virtuous cycle of supply
and demand. Currently, for example, China’s
trade with central Asia is very small, amounting
to around 1 percent of China’s total exports in
2014. However, this represents an increase of
680 percent over the previous decade, and
even greater increase than trade with Africa
(654 percent).
This investment also has major implications
for construction spending. Construction in
Asia already accounts for 40 per cent of global
construction (2013) and the New Silk Road
Plan will further encourage infrastructure
development such as railways, power plants,
telecommunications, ports, etc. in which
Chinese companies are likely to fulfill an
important role. Logistics industries will similarly
benefit, while energy security and access to
commodities are also key drivers. For example,
the five central Asian countries through which
it passes have significant natural resources,
including oil, gas, coal, agricultural land, gold,
copper and uranium.
By facilitating international trade and
investment, the New Silk Road also has
important implications in the expanding use
of RMB as a trade and investment currency,
a key element in the Chinese government’s
economic strategy.
The People’s Bank of China Governor Zhou Xiaochuan has compared the
new investment fund with the World Bank’s investment arm International
Finance Corp and the African Development Bank’s Mutual Development
Fund. These funds are financed by member countries, and are
instrumental in promoting global economic development and trade.
An Experienced Partner
As governments globally fund major infrastructure projects to boost
internal growth and facilitate international trade and investment, they
are increasingly looking to Citi for support. These institutions choose to
work with Citi for a variety of reasons, not least, our local presence and
in-depth expertise in over 100 countries. In the case of the Silk Road Fund,
for example, we provide support and have local expertise in 17 of the 18
countries that are connected via the New Silk Road, giving our clients
unrivalled local market expertise.
As a result, we now support over forty multilateral, regional and national
development banks, including the World Bank, European Investment Bank
and Asian Development Bank, as well as export credit agencies around
the world.
When coupled with our global execution capabilities, Citi has an
unparalleled ability and track-record in meeting the specific requirements
of development banks, government institutions and sovereign investment
funds. By combining our market-leading capabilities across Corporate
and Investment Banking, Markets and Transaction Services, we are able
to develop multi-faceted, bespoke solutions to meet the changing needs
of these institutions and funds — from identifying potential investment
projects to facilitating investment, including treasury, capital markets
development, financing and funding.
Given the growing importance of infrastructure development as an
integral element of facilitating international trade, development and
infrastructure banks and funds such as The Silk Road Fund will play
an increasingly important role in the future. We have built a globally
coordinated coverage group for this client segment, which is closely
integrated with our international network of local specialists. This allows
us to share best practices from around the world, whilst meeting the
specific needs of each institution and development fund.