(Yicai) June 17 -- China’s new economy firms have internationalized rapidly in recent years, driving a growing need for cross-border Chinese yuan investment and funding, executives from Deutsche Bank told Yicai.

The Frankfurt-based lender expects China’s efforts to support its foreign trade and economic enterprises in using the redback for international transactions and investment are expected to lead to a greater need for yuan financing across borders, they said.

In the first four months of this year, China’s non-financial outbound direct investment jumped nearly 19 percent from a year earlier to CNY343.5 billion (USD48.3 billion), according to commerce ministry figures. Last year, ODI rose 5.7 percent to CNY1.04 trillion (USD143.6 billion), with the non-financial ODI up almost 17 percent to CNY917 billion.

Chinese firms have focused their ODI not only on traditional industries such as oil and gas and electricity, but also on new economy areas, including new energy, electric vehicles, and biopharmaceuticals, said Ole Matthiessen, Deutsche Bank’s global head of cash management. 

Their ODI is mainly bound for the Middle East, Southeast Asia, Latin America, and Europe, he said.

Europe is the main overseas target market for China’s EV, battery, and chip industries, according to Matthiessen, who is also Deutsche Bank’s head of corporate banking for Asia-Pacific, Middle East, and Africa. More and more Chinese companies in these sectors are building factories in Eastern Europe to meet demand in the European Union, he said.

Chinese firms in traditional sectors like infrastructure and contract engineering mainly invest in emerging markets with huge growth potential, such as the Middle East, Africa, and Latin America, according to Matthiessen.

New economy firms in financial technology, platform services, and e-commerce, for example, favor countries in the Association of Southeast Asian Nations, he noted.

Deutsche Bank is committed to developing novel products, such as yuan purchase and sales services for offshore clients, to assist Chinese firms in managing exchange rate risks, and help them to increase efficiency in collecting and allocating funds in emerging markets, Leo Yin, vice president of Deutsche China, also told Yicai.

Editors: Zhang Yushuo, Futura Costaglione