The ANZ Banking Group has announced on Friday a memorandum of understanding (MoU) with China Development Bank (CDB) to increase trade and investment between China and New Zealand.

CDB chair Chen Yuan and ANZ chief executive Mike Smith signed the MoU in Auckland with New Zealand Prime Minister John Key and Chinese Vice-President Xi Jinping witnessing the event.

The Chinese vice-president is in Auckland for a three-day official visit and also opened the China-New Zealand Free Trade Agreement seminar on Thursday.

China established CDB in 1994 and acts as one of the three policy banks of Beijing while the MoU is the first signed between ANZ in New Zealand with a Chinese bank as a similar MoU has been signed between the two banks last September covering Australia.

The Chinese bank is under the control of China's State Council and its primary function is to raise funds for Beijing's key infrastructure endeavours across China.

At present, CDB maintains 32 branches and four satellite offices across the country and is one of the biggest issuers of bonds in China with its debts fully backed by the central government.