ING Bank - Growing with China as companies 'go global'

During a recent interview with China Daily, Robert Scholten, ING Bank's country manager for China, talked about how the bank grew with its Chinese clients over the past three decades and what it takes for a commercial bank to support aspirations in China's "go global" policy.

 

Can you briefly talk about ING Bank's background, particularly in China?

As part of Dutch-based ING Group, a global financial franchise operating in over 40 countries, our history began in the Asia-Pacific more than a century ago. Today our commercial, retail and direct banking businesses span 14 markets in the region with intensive coverage of China. We have been in most of these markets for 20 to 30 years. China, needless to say, is one of our key markets.

We expanded our coverage in 2008 to include Mongolia. We were the first foreign bank to establish an on-the-ground presence in the country.

Growing with China - Robert Scholten

What do you offer to your Chinese clients? And who are they?

As a European bank, we pride ourselves with our strong heritage and full-service capabilities, as well as our deep understanding of local environments and market dynamics in Europe. In China, we have dedicated teams providing products and solutions that clients need.

That strong Sino-European heritage puts ING Bank in a good position to support and facilitate business activities between the two regions as Chinese companies continue to look for trading and investment opportunities in Europe.

Our clients range from the biggest State-owned enterprises to European multinationals with operations in China. What has also been very encouraging is the fact that we grow with our clients. For example, more than 20 years ago, we started our business here with our first client, a domestic logistics company that has over the years expanded to be one of the world's biggest players in the industry. The company is still banking with us.

 

In your view, what are the traits Chinese clients see as important in commercial banks?

If I were to just pick two out of the many traits needed to serve Chinese customers, I would say that first you need to know your clients and second you need to have a strong international network.

What makes us unique is that we never push a product or service to our clients just because it works in our home markets. Rather, we go through the process of understanding our clients and then match our expertise with their needs.

Since we first came to China - a country then undergoing gigantic infrastructure development - commodity and structured finance were our core products.

If I were to just pick two out of the many traits needed to serve Chinese customers, I would say that first you need to know your clients and second you need to have a strong international network.

But as some Chinese companies expand globally, we recognise that we can also support them with cross-border merger and acquisition advice, and complex global cash management services offered by Bank Mendes Gans, ING's wholly owned subsidiary.

You cannot be a good commercial bank if you don't have a strong international connectivity. With local knowledge and our international network across more than 40 countries, we are able to support Chinese clients wherever they go. Our China team works with ING Bank's counterparts in other parts of the world - from London, Brussels and Frankfurt to New York - to ensure that we provide the best solutions and international practices.

 

What is the trend in Sino-Europe trade and business activities?

It's definitely in the growth mode. For a long time there seems to have been a general perception that the US has been the biggest trading partner of China all along. Yet according to China Customs statistics China's imports and exports with the EU totaled 559 billion US dollar in 2013, keeping the EU the largest trading partner of China.

A survey also showed 24.5 percent of Chinese trading businesses said their orders in Europe grew in December 2013, signaling the possibility of a record trade figure by the end of this year.

Opportunities are not only arising from the increase in bilateral trade, but also from Chinese companies' plans to expand into Europe for businesses and M&As.

 

The ties between China and the Netherlands have grown very strong in recent years compared with other countries in Europe. What is your view on this?

While economists indicate a growth trend in recent years, we shouldn't forget that actually the Sino-Dutch relationship goes as far back as the 17th century and the first official bilateral relationship was established as early as 1954.

It's true that we are seeing more than ever closer economic ties with both countries agreeing to expand mutual investments. According to statistics, bilateral trade increased from 1.2 billion euro (1.67 billion US dollar) to 37.3 billion euro from 1992 to 2011. Exports to China increased 38-fold to make China the Netherlands' second-largest trade partner outside the EU, next only to the US.

As a Dutch-based global bank, we are definitely excited about the upward trend. Our role is really to bring more Chinese businesses into the Netherlands.

 

What makes the Netherlands attractive for international trade and business?

The Dutch in fact have a very old and strong heritage in this respect. Geographically, the country plays an important role as an efficient gateway for Chinese exports to Europe. The stable investment and favorable tax climate - as well as advanced infrastructure, technological know-how and logistical expertise - also make the Netherlands a friendly and cost-effective location for Chinese companies seeking a European headquarters.

Many of our clients also say the Netherlands has a range of 'softer' factors such as multilingualism, an international-oriented society and a highly educated workforce. Most notably, Dutch business standards are characterised by stability and transparency.

Currently, about 13 percent of Chinese companies in Europe are established in the Netherlands, buoyed especially by the robust growth of M&A activities. In addition, Chinese investment in the country increased strongly to over 2.5 billion euro in 2012. Paired with the Chinese government's "go global" policy, we expect investment activities to further accelerate in the next few years.

 

What are the positive signs ING Bank is seeing for Chinese companies as the eurozone's economy slowly gains momentum?

The outlook is showing signs for cautious optimism. Economic output in the eurozone accelerated in the final quarter of 2013, suggesting that modest recovery remains on track.

In particular, we see President Xi Jinping's visit as a boost to the deep-rooted relationship that our two countries already have.

The Chinese government's "go global" policy has prompted cash-rich Chinese firms to focus on international expansion. Specifically on the M&A front, Europe remains a key market for deal-making supported by the size of Europe's economy, the Netherlands' central location and the quality of its assets. In 2013, there were about 83 Sino-European M&A deals with a total consideration of 16.4 billion US dollar, up 6.7 percent from 15.4 billion US dollar in 2012.

The current asset valuation has also stimulated further interest from some Chinese companies, especially in consumer goods, manufacturing, environmental technologies, culture, real estate, energy, power and utilities, and other high-tech and knowledge-intensive industries.

 

How has government policy helped cross-region business?

The one thing that is certain is that the relationship between China and the EU will continue to strengthen over the next few years. In November 2013, China and the EU agreed to negotiate a bilateral investment treaty to boost access to each other's markets. The EU-China 2020 Strategic Agenda for Cooperation was described as unprecedented, strategic and detailed.

Strong momentum in Sino-European ties will continue. Overall, European countries have become more open and Chinese entrepreneurs have developed more serious interest. We will see opportunities soar as both regions are determined to deepen their ties. In particular, we see President Xi Jinping's visit as a boost to the deep-rooted relationship that our two countries already have.

 

What kind of role do you see ING playing in the growing Sino-European ties?

As one of the leading banks specialising in Sino-European business and investment activities, we are here to offer Chinese companies quality access to Europe, especially in Belgium and the Netherlands. Just like what we have been doing since day one in China, our mission is to grow with our Chinese clients as they go global and expand into Europe.

 

Source: China Daily, 25 March 2014. Copyright 2014 China Daily Information Company. All rights reserved.