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Making sense of Belt and Road – The Chinese commercial bank: ICBC

At the vanguard of the funding effort for the Belt and Road Initiative will be China’s state-owned commercial banks. All eyes are upon them and their lending practices. Will they be expected to pour funds into projects with a tenuous economic rationale in the interests of state policy? Or will they instead be able to assess BRI projects as they would any other enterprise, with a weighing up of risk and return and a commercial decision at the end of it?



In a meeting room in ICBC’s light and airy headquarters in Beijing’s financial district, ICBC president Gu Shu is adamant that his bank will be acting in its own best interests as much as the state’s.

“On ICBC’s part, it’s all commercial-based, because our funding cost is totally different from policy banks – from China ExImbank or from AIIB,” he says. “If we do not do these projects on commercial terms, it will be unsustainable and we cannot be a part of it.”

Nevertheless, ICBC is clearly going to be front and centre in project development. Gu says the bank is now taking part in 212 projects related to Belt and Road, with credit facilities already exceeding $67 billion.

“In the future, we will attach ourselves to over 400 projects with hundreds of billions of US dollars of funding,” he says. “That does not necessarily mean we will provide all the financing, we usually take just some part; that’s the total funding numbers for these projects.”

And Gu clearly sees it as an opportunity more than an obligation.

“Among all the Chinese banks, ICBC has the most intensive network among Belt and Road countries,” he says – 18 through 127 offices and branches.

From ICBC’s perspective, what really is Belt and Road?

“My understanding of One Belt, One Road is that it is a paraphrasing of globalization, another way of saying it,” Shu says. “It’s a collaboration of different economies to supplement each other in what they can do best.

“Theoretically it is very easy to understand, but if we go to the down-to-earth practices, then there are obstacles.”

Unarguable fact

Underlying it all is the unarguable fact that there is not enough infrastructure in many Asian countries and that there are commercial opportunities that arise from addressing the need.

Gu Shu, ICBC

“There is a lack of infrastructure in many places in the world. Somebody should stand up and take the initiative to push this to happen, because the infrastructure is too big a need,” Gu says. “It’s not just about using your revenue and your surpluses, it’s the construction of roads and railways. ICBC’s opportunity and responsibility lies in that area, that we can do something in this initiative.

“Infrastructure will promote international trade between economies, which will in turn bring opportunities for commercial banks.”

For Gu, Belt and Road needs to be about more than just lending. There should be a host of businesses and product lines that stand to benefit. “That’s the reason ICBC is trying to change the capability of our overseas institutions.

“Now, they are pure lenders, but we are trying to give them the capabilities of cash management and other areas, to make them comprehensive service providers.”

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