Chinese banks gearing up for Belt and Road investment

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The government is increasingly scrutinising global investment after some big-money deals in recent years.

The other members of China's so-called "four big banks", Industrial and Commercial Bank of China and Agricultural Bank of China, are also planning similar funds.

Beijing is trying to contain overseas deals after some extravagant purchases in recent years, but while private spending on deals has slumped, acquisitions by Chinese companies in countries that are part of the Belt and Road initiative are soaring, totalling $33 billion as of mid-August. They could not be identified as they are not authorised to speak to the media.

The people said CCB would raise US dollars for the offshore portion of the fund and yuan from onshore investors.

That compared with $31 billion for all of 2016, Thomson Reuters data showed. Funds from offshore investors would be in USA dollars, the people said.

The four lenders and the People's Bank of China did not respond to requests for comment.

Comprising land and maritime trade routes connecting China with Central Asia, South East Asia, Australia and New Zealand, the Middle East, Africa and Europe, the overall infrastructure investment is expected to reach US$900 billion though only a fraction of this has been pledged so far.

Senior China economist at ANZ, Betty Rui Wang, said yuan funds for overseas use would ease Chinese corporate concerns about normal funding channels being restricted by capital controls.

Speaking at the Belt and Road Forum for Health Cooperation in Beijing, he said the proposal from China's President Xi for a "health silk road" was "visionary" and would strengthen and renew ancient links between cultures and people. However, there would still be foreign exchange risk, she said.

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