China eyes Southeast Asia push with $10 billion Manila airport project

Above, passengers disembark from a Saudi Arabia Airlines plane parked at the tarmac of Ninoy Aquino International airport. Capacity at the Philippines’ main aviation gateway is at critical levels, although private sector proposals have been put forward for the airport’s expansion. (Reuters)
Updated 08 March 2018

China eyes Southeast Asia push with $10 billion Manila airport project

HONG KONG: CLSA, the offshore platform of Chinese investment bank CITIC Securities, is working on the finance for a new $10 billion airport in Manila as part of its push into Southeast Asia and China’s ambitious Belt and Road initiative.
In an interview this week, CLSA chairman Tang Zhenyi said that CLSA also planned to open new offices in Vietnam, Pakistan and Dubai this year as the Asia-focused broker continued its expansion into investment banking.
Introduced in 2013, the Belt and Road project is aimed at building a modern-day economic “Silk Road,” connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.
Beijing has called on financial firms to develop overseas lending businesses to help connect China with old and new trading partners including the 10-member Association of Southeast Asian Nations (ASEAN).
The Manila airport project, to be developed south of the Philippine capital, is still awaiting government approval but CLSA has held preliminary talks with potential Chinese backers for the deal, Tang said.
“It looks like we are in good shape to do this. It’s a $10 billion minimum project,” he said. “Citic and CLSA are in the perfect position to talk with all the Chinese financial institutions.”
Tang and CLSA did not give the location or further details of the project. Local media have reported competing airport proposals are currently being studied by the Philippines government.
The involvement in the airport project by CLSA, which was bought by CITIC Securities in 2013, comes at a time it is aggressively expanding its investment banking advisory services beyond its broking origins, by leveraging its China ties.
“China has the capital, has the market. These countries have the need,” he said, referring to the ASEAN countries’ push to boost infrastructure investments.
Tang, who worked for China’s Ministry of Finance and for the World Bank in Washington before joining Citic Group in 2011, became chairman of CLSA in November 2016.
Last year, the company returned to its CLSA branding, dropping the name Citic CLSA, although it does operate as the international arm of CITIC Securities.
As part of its strategy to grab a bigger share of investment banking deals in Asia, CLSA is also in talks with Pakistan’s ministry of finance to help the country sell Panda bonds — debt sold by foreign entities to investors in mainland China.
Tang said CLSA is in the middle of a transformation, and plans to add up to 15 bankers in Southeast Asia this year as it seeks to diversify from its Chinese roots. Of its 120 current bankers, about 80 are involved with China-related projects and 40 with ASEAN business.
“We are hoping by adding more ASEAN content into the whole company, we will see it more 50-50 (between ASEAN and China).”


UK ‘to decide on Huawei 5G next week’

Tensions have been rising between the UK and US over Huawei. (AFP)
Updated 50 min 47 sec ago

UK ‘to decide on Huawei 5G next week’

  • Chinese tech giant expected to be permitted to develop country’s 5G network

LONDON: The UK is expected to announce next week whether to allow China’s Huawei to develop its 5G network, an official said on Friday, setting out reasons for agreeing despite opposition from the White House.

The official said the decision had not yet been taken but that it was likely to be next week.
There had been speculation that the UK would allow Huawei into “non-core” elements of the next-generation 5G mobile networks, such as antennae and base stations attached to masts and roofs.
The US has banned Huawei from the rollout of its 5G network because of concerns — strongly denied — that the firm could be under the control of Beijing.
Washington has been lobbying London to do the same, even threatening to limit intelligence sharing between the two allies if Downing Street goes its own way.
The UK Business Secretary Andrea Leadsom said this week that a decision would be made “soon,” adding that many factors were being considered.
These included “the availability of other providers” and “the work that Huawei has already done in the UK,” she said.
The senior official said that London — unlike Washington — had been using Huawei technology across national systems for the past 15 years.
Security agencies believe they have managed the risk so far and will be able to do so with the 5G network, the official said.
Banning Huawei entirely could also cost “billions” of pounds and delay the rollout of 5G and full-fiber broadband, the official said.
There is also a problem in that few other firms have the technology that Huawei does.
The company provides the least expensive and most advanced alternative for super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.
“There is a market failure here,” the official said, adding that while this could be addressed in the future, for now “we are where we are.”
The UK’s debate about Huawei has dragged on for more than a year, amid intense political turmoil over its exit from the EU.
Brexit day is now set for Jan. 31.