Citi continues to solidify its position in the Asia-Pacific market as it navigates evolving trade landscapes and geopolitical challenges. Marc Luet, Citi's Head of Japan, Asia North & Australia and Banking, shared insights in an exclusive interview on the bank's strategies to support clients through market uncertainties and capitalize on emerging opportunities.
Q: What are your views on the recent U.S. Administration’s tariffs and Executive Orders (EOs)? How do you think this will impact Asia market and how can we help clients in the region navigate the challenging situation?
Photo: Citibank Taiwan
A: Corporates in Asia and across the world have factored this into their current and future business plans and are better prepared to deal with the volatility and potential changes we may see going forward.
For companies in Asia, their priorities are quite clear — they are looking for growth, finding new customer segments in addition to their home markets and delivering better returns to their shareholders.
As a result, we see the trade landscape evolving as companies put in the necessary building blocks to achieve their business growth ambitions in the medium to long term. Large multi-national companies are looking to expand their presence, capture new market segments, and build new global supply chains in Asia and other parts of the world.
Q: What are your observations regarding geopolitical tensions, supply chain shifting and the economic dynamics in the region? Do you see any potential impact on Citi’s business and commitment to Asia?
A: Our commitment to Asia remains strong. It is the fastest growing region and the opportunities are abundant — with the formation of start-ups and innovative new business enterprises, to SMEs becoming large multinationals at a rapid pace, to increasing wealth generation across the region.
In times of uncertainty, the advice and experience we bring as a global bank is invaluable to clients. A challenging economic and geopolitical landscape allows us to help clients effectively navigate hurdles and find new growth prospects in other parts of the world. Our extensive global network, combined with our deep local relationships and understanding of business, politics, and regulatory trends — is key to supporting our clients through volatility and change.
Citi banks over 1300 corporate clients parented in Japan, Asia North and Australia (JANA) cluster. We bank nearly 3800 subsidiaries of global MNCs from 40+ countries in JANA. Our strategy remains unchanged — we continue to support our clients cross-border needs wherever they choose to do business.
Q: Amid the global supply chain realignment, what are your observations regarding clients’ preference on certain markets? Do you see any potential trade corridors?
A: Global supply chain shifts are here to stay and will likely get pronounced as administrations across the world rethink current trade agreements and plan for new ones. There is a continued evolution of trade corridors, for instance, we are seeing increased flows into North America from Asia, as companies look to be closer to their end consumers. Latin America, as well as Central and Eastern European (CEE) economies, meanwhile, continue to reap benefits from nearshoring and friendshoring. The Middle East is also now more connected to Asia.
Closer to home, the Asia-to-Asia corridor has grown significantly and continues to see rising investment. Technology, Industrials (Mobility and Diversified Industrials) and NRCET (Energy and Chemicals) have been among our key outbound sectors over the last four years.
Furthermore, we have seen a significant uptick in outbound investments from Taiwanese companies into Singapore, India and ASEAN, and we expect this trend to continue. Citi is also seeing strong client led growth in global corridors such as Taiwan to North America, Mexico and Europe, while inbound investments from North America into Taiwan remains sizable.
Q: What is Taiwan’s role in Citi’s regional development? What are your views on the AI-driven trends and their potential impact on the market?
A: Taiwan is a highly advanced economy and a technology powerhouse. It is a key link in the global technology and manufacturing supply chain particularly in semiconductors, science and technology, health and education.
We are excited about the future of Taiwanese companies and the dominant role they will continue to have on the global stage and in the technology sector, particularly as the race for AI heats up. We remain committed to Taiwan and our clients and will continue to support their local and cross-border needs.
AI will continue to be the super trend in the near to medium term. We saw a lot of demand for AI last year which spurred investment banking activity in Taiwan and in parts of Southeast Asia and Australia across the digital infrastructure space. Last year saw a large number of fundraisings in anticipation of AI becoming much more prevalent across the digital infrastructure space like data centers, towers, fiber, cooling companies - which is the basic infrastructure required to get AI to the user.
Taiwanese companies have demonstrated strong capabilities across all segments of the AI industry chain, from upstream chip design and manufacturing to midstream system integration and downstream application services, forming a comprehensive and highly competitive ecosystem.
Looking ahead, the roll-out of more AI-enabled applications will drive stronger demand across the world, benefitting Taiwan’s end-to-end technology supply chains.
Q: How will Citi differentiate itself from other local and foreign banks in Taiwan?
A: Citi’s key differentiator is our ability to help clients do business in many parts of the world, with a local presence in over 90 markets and ability to do business in more than 180 markets.
We offer tailored products to ensure companies’ smooth operations and expansion in Taiwan and other regions, and to succeed in diverse and complex markets, enabling clients to overcome the financial and operational challenges associated with doing business in new markets. We support our clients’ capital and fundraising needs and provide a raft of banking solutions such as cash and liquidity management; treasury solutions; supplier and instant payments; trade and supply chain finance; to forex and hedging solutions, among others.
In Taiwan, Citi banks a client base of more than 900 international enterprises, nearly 1,000 emerging and mid-size enterprises, and over 100 top domestic enterprises and financial institutions through our corporate, commercial and investment banking business. We have a deep-rooted presence in Taiwan, having been here for over 60 years. This means we have witnessed the ups and downs in the market, supporting our clients through different stages of market evolution.
Since 2020, Citi has raised over US$25 billion for local clients from global capital markets to support their financial needs. In terms of optimizing working capital and cross-border cash flow, Citi provides corporate clients with international remittance services in 140 different currencies with liquidity management and automated reconciliation services to help clients flexibly handle various operational and funding needs.
We are able to support our clients’ banking needs wherever they choose to do business through our comprehensive product offerings and platforms.
Q: Taiwan Semiconductor Manufacturing Company (TSMC) has announced to invest US$100 billion in the U.S. over the next four years. What’s your view if the impact will be on the U.S.-Taiwan trade corridor? What is the impact on the semiconductor supply chain in Asia?
A: Taiwan is the United States’ seventh-largest trading partner, and the United States is Taiwan’s second-largest trading partner, according to data from the US Department of State . Foreign direct investment (FDI) from Taiwan into the U.S increased significantly since 2009, with direct investment reaching $21.5 billion in 2023. Taiwan’s direct investment in the U.S. is led by semiconductors, manufacturing, and wholesale trade.
Two-way trade between the two markets has been growing steadily and will continue to increase given the synergies and co-dependence in the technology and semiconductor space.
Asia-Pacific will also continue to benefit from the global demand for semiconductors, as it is home to the world’s foremost industry players, with companies from Taiwan, China, Japan, and South Korea dominating various parts of the highly integrated and specialized semiconductor supply chain. Asia holds a prominent position as the main semiconductor manufacturing hub, as Taiwan, South Korea, and China are responsible for close to 90 percent of global semiconductor foundry revenue, with Taiwan alone accounting for more than 60 percent market share.
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