Citigroup CEO: Asia is ‘the epicenter of wealth creation’
Fears of a slowdown in Asia have gripped the global economy after the release of disappointing third quarter GDP growth in China, where real estate woes and power shortages contributed to the nation’s weakest quarterly performance in a year.
But Citigroup (C) CEO Jane Fraser steered clear of pessimism about the economic outlook in Asia in a recent interview. She took a bullish view focused on the region’s growing middle class and its ascendent midsize companies.
“When I look at the Asia markets themselves, across the board,” Fraser told Yahoo Finance at its All Markets Summit on Monday. “Different geographies, you’re seeing some differences, but I’d say it is the epicenter for wealth creation.”
“We’re seeing this in terms of a rapidly-growing middle class — therefore, we’re focused on wealth,” she adds. “We’re seeing this in half of the world’s unicorns have been created in Asia, so it’s also driving our mid-market businesses as almost like an elevator.”
Fraser, who took over as CEO in March, has undertaken a “strategy refresh” that includes a shift in the focus of the company’s operations to Asia.
Last month, the company’s commercial banking unit opened a China desk in Singapore meant to help small- and medium-size Chinese companies expand across Southeast Asia. The move gave the firm six desks in the region.
Citi provides banking services for 50% of the unicorns (private companies with at least a $1 billion valuation) in India, as well as 30% of the multinational companies in the country, Fraser said.
Fraser emphasized the optimistic outlook for the tech sector in Asia.
In recent months, a Chinese crackdown on major tech companies like e-commerce giant Alibaba (BABA) and search giant Baidu (BIDU) has come alongside continued support for industries like advanced manufacturing.
Plus, China announced last year $1.4 trillion in tech investment through 2025 that aims to support key areas like artificial intelligence and wireless infrastructure in an escalating competition with U.S. firms.
“What we are, again, seeing across the board is this digital acceleration,” Fraser says. “It’s being powered by e-commerce. It’s being powered by technology innovation.”
“So all of this activity that’s occurring of transformation means for us, and I think for our peers,” she adds. “Being in this epicenter of that wealth creation, being in the epicenter of digital and technology innovation is really critical.”
Speaking to Yahoo Finance, Frasier highlighted the positive outlook for economic activity in industries set back by COVID-19.
“We’re also seeing the recovery from COVID starting to accelerate,” she says.
“Ourselves, we’re starting to bring people back into our sites again after the second surge of COVID in India,” she adds. “We’re seeing it beginning to see a stronger recovery there after a pretty brutal few months in many, many geographies in Asia from a COVID perspective.”
“I’m bullish, as you can tell,” she says.