Trump said on the election trail that he would renegotiate trade pacts with China and Mexico, withdraw the US from the World Trade Organisation and the Trans-Pacific Partnership and retaliate against currency “manipulators”.
China could not avoid the impact from the introduction of trade barriers under such a programme, as it is major trader with the US, Suwatchai said.
If Trump were to execute what he promised during the election campaign, Bangkok Bank (China) acknowledged that it would face a new challenge in doing business in China next year, on top of the giant economy’s continued slowdown, he added.
“We will monitor the policy of the US and the impact from that policy on our clients. Yet, our clients have less exposure to the US because, since the sub-prime crisis, Chinese companies shifted from exports to supplying goods for the domestic market instead. More than half of the bank’s customers are engaged in domestic consumption,” the CEO explained.
Bangkok Bank’s China office has a lending target for next year and there is no plan to adjust the business plan following the result of the US presidential election, he stressed.
The bank looks to the financing of corporates doing business in sectors related to domestic growth in China, such as foods, services and electricity-generation projects, Suwatchai said.
China still has demand for power to support domestic consumption, and it was looking to finance this business, he said, adding that his bank and Bangkok Bank’s headquarters had recently agreed to facilitate a loan of 700 million yuan (Bt3.63 billion) to a Thai corporate that had set up a joint venture with Chinese companies to proceed with a 3-billion-yuan coal-fired power plant.
Two-thirds of the investment cost comes from financing, for which banks in China are supporting the local companies in the joint venture.
Construction of the power plant, which will have a production capacity of 1,400 megawatts, will take two years, with electricity generation scheduled to commence in 2019.
The chief executive said that lending to a coal-fired power project represented lending growth of 6-7 per cent for his bank office. With the loan amount being booked to its portfolio next year, the bank’s 2017 lending growth will be higher than this year’s level, he added.
Bangkok Bank in China also has two or three other deals in the pipeline, including the financing of serviced apartments and food businesses.
While inbound investment has eased off due to the slower growth of China’s gross domestic product, the fact that the country has been able to sustain GDP growth of 6.7 per cent for three consecutive quarters was a healthy pointer supporting domestic-market expansion, he said.
Bangkok Bank in China has seen more demand for working-capital loans than for term loans, as the latter require greater consideration before businesses are prepared to commit, he explained.
Two-thirds of the bank’s loan portfolio is in the form of lending for working capital.