Citibank, General Electric keen to join $US1trn on China’s One Belt, One Road

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As China plans to build roads, rail lines, ports and airports across Asia, Africa and Europe, sceptics say Chinese companies will be the only real winners from the ambitious initiative. General Electric and other US companies disagree.

In 2014, Chinese construction and engineering companies ordered $US400 million ($541 million) worth of equipment from GE to install overseas, overwhelmingly in the region that encompasses the effort, known as “One Belt, One Road.”

Last year, those orders totalled $US2.3 billion, and GE plans to bid for an additional $US7 billion in orders for natural-gas turbines and other power equipment in roughly the next 18 months.

China is pulling companies and countries more tightly into its economic and geopolitical sphere with the “One Belt, One Road” plan. A forum on the effort in Beijing, hosted on Sunday by China’s president, Xi Jinping, drew President Vladimir Putin of Russia and other state leaders, as well as officials from more than three dozen countries, including the US.

The initiative could lead to a global building spree; China has promised more than $US1 trillion of investment over the long term.

Western companies are angling aggressively for a piece of the action. Citibank won a contract from Bank of China to handle a complex $US3 billion bond offering last month to raise money for opening branches across Asia, Eastern Europe and East Africa. Technology and manufacturing company Honeywell International is selling equipment to Central Asia for processing natural gas.

Some non-Chinese companies are also tweaking their businesses to win more orders related to Beijing’s plan, and GE has rearranged its marketing staff for global power equipment to give them priority.

China’s spending does not necessarily mean immediate profit. Most of the money has yet to be earmarked, much less spent. And China is making sure its own companies will be the biggest beneficiaries.

For businesses, the plan offers uncertainty as well as promise. The infrastructure that China is building could someday become the avenues for billions of dollars in increased trade, or become debt-ridden sinkholes. Xi is pressuring companies doing business in China to participate no matter what the prospects.

by Keith Bradsher

The New York Times

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