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China Development Bank Will Expand to Brazil, Egypt and Russia
China Development Bank Corporation opened its first branch outside the mainland in Hong Kong on the 29th of July, 2009 as the state-run bank for public works projects plans to expand carry out. Russia, Egypt and Brazil are the locations of the next expansions. Moscow and Cairo will begin operating later in 2009 while Rio de Janeiro will operate in 2010, according to Vice President Li Jiping. The bank has already engaged in lending to the three countries and admit that their "...strategic goal is to become an internationalized bank" and support the nation's rapid economic growth in the next decade. Chinese Premier Wen Jiabao said on July 10th that the nation's $2 trillion plus of foreign exchange reserves "should be used to help companies invest abroad." The China Development Bank Corporation plans to invest in ports, steel mills and energy in Brazil, according to Rio de Janeiro state Governor Sergio Cabral. In addition, the bank has "expressed interest" in investing in projects in the 2014 World Cup Soccer tournament and Rio de Jainero's bid for the 2016 Olympics. In Russia, the bank lent $1.3 billion to Russia's state development bank, Vnesheconombank. Meanwhile, in Ghana, the bank lent more than $1 billion to finance a cotton facility in Malawi and power station in Ghana in 2007.
China Development Bank Corp., the state-run bank for public works projects, opened its first branch outside the mainland in Hong Kong today and plans offices in Russia, Egypt and Brazil as part of a global expansion push. The offices will start operating in Moscow and Cairo this year and the Rio de Janeiro area next year, Vice President Li Jiping told a press conference. The Beijing-based bank agreed in May to lend $10 billion to Brazil's state-controlled oil company, helped finance a fund in Africa and extended loans in June to Russia's development bank. "Our strategic goal is to become an internationalized bank," Li told reporters, adding that the Hong Kong branch will cover Asia. "Mainland organizations can effectively go out to the international market through this Hong Kong platform." Chinese Premier Wen Jiabao said on July 20 that the nation's more than $2 trillion of foreign-exchange reserves should be used to help companies invest abroad. China's "going out" strategy is also designed to help ensure the nation has access to the resources needed to sustain the fastest economic expansion among the world's 20 largest economies. The bank agreed to lend $1.3 billion to Vnesheconombank, Russia's state development bank, the Moscow-based lender said June 14. The China-Africa Development Fund, which has helped finance a cotton facility in Malawi and power station in Ghana, was set up in June 2007 with an initial $1 billion from China Development Bank. Brazil Plan The branch in Brazil will invest in ports, steel mills and energy, Rio de Janeiro state Governor Sergio Cabral said on June 30. The bank also has expressed interest in investing in projects related to the 2014 World Cup soccer tournament and Rio's bid for the 2016 Olympics, Cabral said in a statement. The city is home to Petroleo Brasileiro SA, which is considering buying Chinese equipment in return for further loans, and Vale SA, the world's largest iron-ore producer. China, the world's third-biggest economy, became Brazil's leading trade partner this year after the global recession choked sales to the U.S. The two countries' central banks are studying a proposal to use their own currencies -- the real and the yuan -- in bilateral trade instead of the U.S. dollar. Leaders of Brazil, Russia, India and China -- the so-called BRIC nations -- called for a "more diversified" monetary system to reduce dependency on the U.S. dollar at a June 16 meeting in the Russian city of Yekaterinburg. China Development Bank's profit tumbled 28 percent last year on higher loan losses as the nation's economic growth slowed. The bank, which had 3.8 trillion yuan ($556.3 billion) of assets at the end of 2008, received a $20 billion capital injection from the government in December 2007 and is seeking to become a commercial lender. The Ministry of Finance owns 51.3 percent of the bank and Central Huijing Investment Co., a unit of China's $200 billion sovereign wealth fund, holds the rest.read source article