HONG KONG (Reuters) - China’s largest state-owned commercial banks are raising billions to fund investment under Beijing’s “Belt and Road” drive, people close to the matter said, bolstering ambitions to revive Silk Road trade routes and internationalize the yuan.

A sign of China Construction Bank is seen at a branch in Beijing, China, April 21, 2016. REUTERS/Kim Kyung-Hoon/File Photo

China Construction Bank Corp (CCB) 601939.SS0939.HK, the country's second-biggest bank by assets, has been conducting roadshows to raise at least 100 billion yuan ($15 billion) from onshore and offshore investors, the people said.

Bank of China (BOC) 601988.SS3988.HK, the smallest of the country's "big four" lenders, aims to raise around 20 billion yuan, two of the people said.

The fundraising comes less than a week after the government said it would strengthen regulation to reduce risk for domestic firms investing abroad and curb “irrational” Belt and Road investment.

The government is increasingly scrutinising international investment after some big-money deals in recent years. Private spending on overseas mergers and acquisitions has since slumped in countries other than those targeted by the Belt and Road initiative, where investment for 2017 hit $33 billion this month.

That compared with $31 billion for all of 2016, Thomson Reuters data showed.

CCB and BOC are raising money via their private equity or other investment platforms, as part of a broader central bank push to invest yuan overseas, one of the people said. Funds from offshore investors would be in U.S. dollars, the people said.

Top lender Industrial and Commercial Bank of China Ltd 601398.SS1398.HK and third-ranked Agricultural Bank of China Ltd 601288.SS1288.HK are also considering raising Belt and Road funds, two of the people said.

The people were not authorised to speak with media on the matter and so declined to be identified.

The four lenders and the People’s Bank of China did not respond to requests for comment.

INTERNATIONAL YUAN

The fundraising follows government calls on financial institutions to develop overseas lending businesses, targeting a combined 300 billion yuan, to help connect China with old and new trading partners under an initiative modelled on the Silk Road, which stretched from Asia to Europe for almost two millennia.

Raising yuan, also known as renminbi, for overseas investment would also increase the currency’s use in global trade and further its internationalisation, thereby reducing exchange-rate risk and preserving China’s foreign reserves.

“Because those Belt and Road countries have close economic and trade ties with China, after they receive our yuan funds, they can use renminbi to pay for Chinese goods, equipment and labour,” said a banker at one of the lenders with knowledge of the fundraising.

“That is the overseas renminbi recycling mechanism we’ve envisioned and an important way to push forward the internationalization of renminbi.”

Senior China economist at ANZ, Betty Rui Wang, said yuan funds for overseas use would ease Chinese corporate concerns about normal funding channels being restricted by capital controls. However, there would still be foreign exchange risk, she said.

“Many of those Belt and Road countries are developing economies with underdeveloped financial markets,” Wang said. “Companies may need to convert yuan into local currencies after all.”