By Selena Li
HONG KONG, Nov 3 (Reuters) - Investments by some companies from Asian economies in the United States are set to keep climbing amid a global supply-chain shake-up, Citi's international chief said, with spending expected to build in stages.
"These companies have a lot of capacity to invest. I think that investments from the South Koreans, Taiwanese, and Japanese firms is likely to continue," said Ernesto Torres Cantu, who heads Citi's global business outside of North America, across more
than 180 countries and jurisdictions.
There is a lot of investment from global companies into the United States, with "double-digit growth in the inbound business into North America", Cantu told Reuters in Hong Kong.
Citi and JPMorgan are financing Japanese projects tied to Tokyo's $550 billion U.S. investment pledge, while the White House recently unveiled the initial tranche of Seoul's $350 billion strategic package.
Investments in U.S.-bound projects tend to compound over time, Cantu said, comparing a company's capital expenditure to a multi-stage manufacturing ramp-up, from buying land to building a factory and running daily operations.
"So, it just keeps going up."
Large multinationals are showing resiliency amid geopolitical shocks, and are "adjusting exceptionally fast", Cantu said.
While tariffs remain a factor, he said the Gulf War may be having a bigger impact, which is forcing many companies to rework their trade flows and supply chains.
That requires the bank to keep executing payments, trade finance and transaction settlements for clients across changing market environments, he noted.
While Citi's overall revenue rose by 8% in the third quarter of this year, its services business, which provides cash management, payments, trade finance as well as liquidity to corporations, financial institutions, and governments outperformed with a 15% increase in revenue.
Cantu also expects flows through other cross-border corridors involving Asia to keep rising, with China and India at the centre of two of the most active ones.
Trade between Britain and India is "growing significantly" after the tariff cuts, he said. Cantu expects the European Union's free trade agreement with India, which takes effect in 2027, to bring "a lot of business opportunities" too.
"We see business expansion from China to the rest of the world continuing to grow," he said, adding that flows from China to the rest of the world have expanded "significantly," by more than 20% a year for the past two years.
In China, Citi, which recently won approval to set up a wholly owned securities unit, plans to draw on its large corporate banking client base as it seeks more of the onshore securities business serving both local and international companies, according to Cantu.
(Reporting by Selena Li; Editing by Raju Gopalakrishnan)
