Citi’s China-US corridor thrives as mainland firms hedge risks amid trade turbulence

Escalating trade tensions between the United States and China have not slowed down corporate activity between the two nations, according to Citi. Chinese companies are actively using risk-hedging strategies to protect their global market share, rather than pulling back from the US market. Citi's China CEO, Zhang Wenjie, reported a 44% year-on-year revenue surge across the bank's China-US corridor in the first half of the year.

Chinese firms are increasingly turning to international banks for foreign exchange hedging, managing trade exposure and reconfiguring capital flows. The resilience in corporate activity comes as China enters a new phase of global expansion, dubbed "Going Global 3.0." This phase involves deploying comprehensive hi-tech supply chains abroad, focusing on green energy, electric vehicles, consumer electronics, and artificial intelligence infrastructure.

Chinese firms are moving beyond cost-based competition and are now exporting advanced technology and localised supply chains that contribute to the economic development of host countries. To manage their global operations, mainland Chinese parent companies are adopting a "dual-hub strategy," maintaining domestic headquarters while establishing regional treasury centres in Hong Kong.

This shift has made the Hong Kong-mainland China corridor Citi's largest and most active international banking route globally. In July, Alibaba Group Holding priced an HK$80 billion (US$10.2 billion) share placement to fund its AI buildout, the largest primary follow-on share sale by a Hong Kong-listed company, with Citi serving as one of three co-bookrunners.

Citi is also expanding its network of dedicated "China desks" to support the growing footprint of Chinese companies in emerging markets, including Central Asia, Southeast Asia, the Middle East, and Latin America.