HONG KONG: Global banks including Citigroup and HSBC are boosting their staff and presence for offerings in yuan — from capital market solutions to hedging — as China’s drive to build a modern Silk Road fuels demand. The push rides on hopes Chinese President Xi Jinping’s policy of building a Silk Road to expand global trade and influence of China will accelerate the internationalisation of yuan, also known as the renminbi (RMB). The Chinese currency’s ranking as a world payment currency fell to sixth in June from fifth two years ago, according to industry tracker SWIFT, as capital outflow curbs take some shine off the yuan. However, bankers believe Chinese firms’ aggressive expansion in countries from Vietnam to Belgium could reverse this trend as such businesses demand products and services denominated in their home currency. “As our clients increase their operations across the BRI (Belt and Road) countries … we are seeing a pick-up in demand for RMB,” said Rajesh Mehta, Citi’s Asia Pacific treasury and trade solutions head. Citi is planning to add 25 staff to work in eight key trade corridors over the next one year under the Belt and Road programme, some of them redeployed from other parts of Asia Pacific to South Korea, Vietnam, China, Japan and Hong Kong. Its yuan-linked services include trade finance, hedging, cash management, and capital markets solutions in most of the 58 markets across the Belt and Road countries. It also has nine China-specific business desks along the Silk Road corridor. Unveiled in 2013, the Belt and Road project is aimed at connecting China’s economy by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa. Chinese acquisitions in the 68 countries officially linked to the initiative are soaring and totalled $33 billion (£24.5 billion) in the year to mid-August, surpassing the $31 billion tally for all of 2016. Published in Daily Times, September 27th 2017.