Asian firms boost US investments as supply chains shift
Citi’s head of international business outside North America, Ernesto Torres Cantu, told Reuters in Hong Kong that Asian firms are showing strong capacity to invest in the United States, with inbound business to North America growing at double-digit rates. The surge reflects global companies expanding their US presence, a trend Cantu expects to continue.
Japanese projects linked to Tokyo’s $550 billion investment commitment to the US are being financed by Citi and JPMorgan. In parallel, the White House announced the first phase of South Korea’s $350 billion strategic investment package, underscoring the broader Asian push into the American market.
Cantu explained that US-bound investments typically progress through stages—land acquisition, factory construction, manufacturing setup, and day-to-day operations—creating a steady flow of capital over time. He noted that large multinationals have remained resilient despite geopolitical disruptions, quickly adapting to new business conditions.
While tariffs remain a factor, Cantu suggested the Gulf War may have a larger impact on corporate decisions, prompting firms to rethink trade routes and restructure supply chains. This shift is driving heightened demand for banking services such as payments, trade finance, and transaction settlements.
Citi’s services business reported a 15 % revenue increase in the third quarter, outpacing its overall 8 % revenue growth and highlighting the strength of its transaction-banking operations. Cantu also projected further expansion of cross-border flows involving China and India, with China’s outbound flows rising more than 20 % annually over the past two years.
In China, Citi received approval to set up a wholly-owned securities unit, aiming to capture a larger share of the on-shore securities market by leveraging its corporate banking relationships.
Why it matters
The rise in Asian investment into the US signals sustained demand for banking services that could benefit transaction-focused financial institutions.
FAQ
Which Asian economies are increasing US investments?
Japan and South Korea are highlighted, with Tokyo committing $550 billion and South Korea launching a $350 billion strategic investment package.
What banking services are seeing higher demand due to these investment trends?
Payments, trade finance, and transaction settlements are experiencing increased demand.
How did Citi’s services business perform in the third quarter?
It posted a 15 % revenue increase, compared with an 8 % rise in the bank’s overall revenue.
What is the expected impact of the Gulf War on corporate investment decisions?
Cantu said the Gulf War could prompt companies to reassess trade routes and restructure supply chains, influencing investment choices.
Source: Economic Times Markets. See the original source for full details.
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