BEIJING: Bank of China Ltd plans to extend more credit to local enterprises and further expand its overseas businesses to take advantage of opportunities arising from the Belt and Road Initiative.
The State-owned lender plans to extend credit of $20 billion this year and scale it up to $100 billion in three years, according to top officials from its Chongqing branch.
“Bank of China is trying to attract more clients that are distributed along the Belt and Road Initiative routes. We are seeking new markets and new growth areas for our overseas lending and capital settlement businesses,” said Liu Xianqi, deputy general manager of BOC’s Chongqing branch.
The initiative, a development strategy proposed by President Xi Jinping in 2013, refers to the Silk Road Economic Belt, which will link China with Europe via Central and Western Asia, and the 21st Century Maritime Silk Road, which stretches from southern China to Southeast Asia, South Asia, Africa and Europe.
The Silk Road Economic Belt will be established along the ancient Silk Road trade route, stretching northwest from China’s coastal area through Central Asia onto Europe. Chongqing, the only municipality in Southwest China, is an important hub on the Silk Road Economic Belt.
The Chongqing-Xinjiang-Europe railway is an important transport connection between China and Europe. The route connects western China with Kazakhstan, Russia, Poland and Duisburg in Germany. Freight shipments on the route take 14 days to reach the final destination, which is a month shorter than ocean shipping.
In addition, shipment costs are significantly lower than that of air transport. About 100 freight trips were undertaken on the railway last year, and the target for this year is about 250 trips, said officials, adding that cheaper costs and shorter duration have made it a viable transport alternative for traders.
“The Chongqing-Xinjiang-Europe railway was built to develop the electronic information industry and processing trade. The ancient silk road has got a fresh lease of life from the new railway connection,” said Weng Jieming, executive vice-mayor of Chongqing Municipal Government.
Bank of China hopes to play a vital role by bridging enterprises in Chongqing and other Asian and European countries with its financial services.
Li Jun, supervisor of Bank of China Ltd, said: “Bank of China has established branches in 18 countries along the route. We plan to add new affiliated agencies in the next three years, and further enlarge the scale of financial services along the route.”
In Poland, the Polish branch of BOC is eyeing rapid growth in business after three years of operations.
Xia Bin, vice-president of Bank of China Ltd in Poland, said: “We are in talks with the largest airline and chemical fertilizer companies in Poland. The Poland branch posted profits of more than 5 million euros ($5.56 million) by the end of last year, and expects to improve upon this figure this year,” said.
In Russia, the bank’s Russian branch has been providing financial services to Russian Forest Products Group, one of the top three Russian forestry companies.
“The Chinese market is one of our most important markets, and we export 90 percent of the products to China. We are expecting a surge in trading volumes and business between Russia and China thanks to the Belt and Road Initiative,” said Dmitry Valtfogel, chief financial officer of the Russian company.
It currently uses the Russian rouble for settlements and plans to switch over to the yuan subsequently.
