The International Operations and Future Governance of China Development Bank
Nomura Institute of Capital Markets Research
November 3, 2010
Nomura Journal of Capital Markets, Vol. 2, No. 2, 2010
China Development Bank (CDB) has been steadily expanding its international operations in recent years. As of end-2009, it had $97.9 billion in foreign currency loans, which are mainly used to facilitate Chinese companies' international operations and exports of plant and equipment, outstanding. When CDB was established in 1994, its role was that of a policy bank lending to domestic borrowers for domestic projects. Since 2004, however, it has also become active internationally. CDB and its investment funds assist Chinese companies in expanding overseas. Its own overseas expansion has not been interrupted by its privatization in December 2008. We see a number of possible areas of cooperation between CDB and Japanese financial institutions. For example, (1) greater disclosure by CDB might enable those familiar with the experience of similar institutions in Japan to share their knowledge with CDB; (2) in the case of overseas projects involving both Chinese and Japanese companies, CDB might finance the Chinese companies while Japanese financial institutions might finance the Japanese companies; and (3) Japanese institutions might assist CDB to raise capital, including equity capital, on international financial markets.
Number of Pages in PDF File: 17
Keywords: China Development Bank, CDB, CAD Fund
JEL Classification: Ｅ62, F34, G21, H81Accepted Paper Series
Date posted: November 4, 2010
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