The Bank of China is one of the world’s largest banks, ranking No. 13 on the 2022 Forbes Global 2000 list of the world’s top publicly traded companies. The Beijing-headquartered institution was among a record number of businesses from China to make the list this year (see related post here.)
Wei Hu, president of the bank’s US operation, spoke at the “US-China Business Forum” organized by Forbes China and held at Forbes on Fifth in New York on Aug. 9. I had a chance to speak with Hu about the bank’s US business, the outlook for the US economy, and the impact of geopolitical tensions between the US and China. Hu is also chairman of the China General Chamber of Commerce, an organization of Chinese businesses in the US whose members contribute directly and indirectly to the employment of more than one million Americans. Edited excerpts follow.
Flannery: The bank has expanded greatly since you opened your first branch here in 1981. To what extent does your business mix here differ from China?
Hu: The bank is the most international of all the banks in China. Although the market is a bit different, we share the same strategy — to serve the local community while connecting with the globe.
Nevertheless, we also utilize different resources. In the US, our resources are limited – in China, our branch network is naturally much larger. We focus the resources that we have locally (in the US) toward key clients – larger companies, key real estate developers and Chinese companies going global, and we are working with them to support local economic growth, together with trade and investment between US and China, as well as the rest of the world.
Flannery: How does the US rank among all of your overseas markets?
Hu: Bank of China is operating in more than 60 countries and regions around the globe, and the US is definitely one of the key markets, given the size and the opportunities between the two economies. Fortunately, we have the market (at home), we have a strong reputation, and we have a dynamic talent pool.
Flannery: The US by some definitions has entered into recession in the first half of the year. Whether we call it that or not, growth is sluggish. How’s that impacting your business?
Hu: We understand that economic growth during the past two quarters has been negative, and we are seeing some continued cooling down in the overall economy. We are quite cautious about the progress of the economy, about the potential impact from interest rate hikes and also the credit cycles. However, we remain cautiously optimistic about our growth in the near future. Our customers are top-tier customers with solid credit profiles. We always take a prudent approach and have strict standards for risk management. We will continue to monitor the evolving market closely.
Flannery: What about the geopolitical difficulties in the world right now, particularly the US and China? What’s the impact of that on your business?
Hu: I would say that’s actually quite a challenging problem for us, not only for the bank, but also for our member companies of the China General Chamber of Commerce. As the two largest economies in the world, the US and China are inextricably linked. A mutually beneficial and strong relationship is extremely critical. Unfortunately, the conflict is observable. Many activities between the two have drastically declined. The impact, uncertainty and complexity exist on many fronts.