In reaching out to China to raise money, Barclays is demonstrating an important shift in the flow of global capital.

If the deal is completed, it would be the biggest indication yet of China's growing role in international commerce. The deal could leave it as the largest shareholder in one of the biggest banks in the U.K., joining the company in strategic decisions.

"This is basically a flow of capital from emerging markets to established markets," says John Studzinski, the former head of investment banking at HSBC Holdings PLC, who is now head of Blackstone Group's mergers-and-acquisitions advisory group. Beijing recently agreed to invest $3 billion in Blackstone. The firm advised China Development on the deal. "Going forward, you have to look at where wealth is being created... I think it's a very logical trend."

Britain's Barclays is currently in a bidding war against a consortium of European banks for ABN in what would be the largest banking deal to date. Barclays's bid is less than that of the consortium, led by Royal Bank of Scotland Group PLC, and Barclays, needing cash, turned to China.

"It's more than just pools of capital," said Jerry del Missier, a Barclays Capital co-president. "It's about long-term strategic partnerships."

Barclays has used the investment from China to help increase its ABN Amro bid by 4.1 billion euros ($5.67 billion) to 68.89 billion euros. Barclays said its new bid included 24.8 billion euros in cash and was up from its previous all-stock offer.

If the deal is completed, and China Development invests the full $13.5 billion, it would dwarf other overseas deals by Chinese institutions. The biggest deal so far came in October 2005 when China National Petroleum Corp., a state-owned oil company, agreed to buy PetroKazakhstan Inc. for $4.18 billion.

Even if Barclays doesn't win the takeover fight for ABN, it will be transformed by its new business relationship in China and win a minimum $3 billion investment. China Development's main business is lending to Chinese government-owned companies, a growing number of which are doing big business overseas. That gives it an extensive portfolio of Chinese customers it can introduce to Barclays for more complicated financial products and services that China Development doesn't provide--such as asset-management services.

To ensure that China Development's investment wouldn't be blocked by a political backlash, Blackstone discussed the deal with top British officials including Alistair Darling, the new chancellor of the Exchequer, Mervyn King, governor of the Bank of England, and Sir Callum McCarthy, chairman of Britain's Financial Services Authority. The officials said the deal would be seen as a vote of confidence in Britain's financial sector, not as a threat, said Blackstone's Mr. Studzinski.

Antony Leung, a former Hong Kong finance secretary who now heads Blackstone's private-equity operation in greater China, acted as the day-to-day liaison with China Development.

China Development also boasts an international advisory council including major figures in global finance such as Maurice "Hank" Greenberg, the former head of American International Group Inc., and former Bank of England Gov. Sir Edward George.

Under terms of the deal, China Development will buy as much as 2.2 billion euros of new shares in Barclays initially, amounting to a 3.1% stake. China Development will then buy as much as 7.6 billion euros of additional Barclays's shares, if the British bank's bid for ABN succeeds, and if regulators agree. That would give China Development a stake of about 8% in the newly enlarged Barclays, making it by far the biggest shareholder in the British bank.

For the Barclays deal, China Development will raise funds by issuing debt on the domestic market.

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