Foreign firms reaffirm belief as Shanghai evolves into a global financial hub

Huang Yixuan
Known for its pioneering role in China's opening up, Shanghai sees foreign investment fueling the city's progress in the financial industry to a large extent.
Huang Yixuan

Shanghai, with its financial industry leading the country, is by bold leaps and bounds developing into an international financial hub.

Also known for its pioneering role in China's opening-up, the city sees foreign investment fueling its progress in the financial industry to a large extent.

For HSBC Group, as the biggest and fully licensed foreign financial institution in China, Shanghai is a major investment destination.

Foreign firms reaffirm belief as Shanghai evolves into a global financial hub

HSBC, which in September opened a branch in the city's Lingang New Area, plans to further invest and develop in the country with an expected investment exceeding 3 billion yuan in the 2020-2025 period.

Some of HSBC's divisions for various businesses, namely banking, insurance, fund, and financial technology, have chosen the metropolis to set up their Chinese mainland headquarters.

Over the past 10 years, Shanghai has made huge progress in constructing an international financial center, with the total financial volume rocketing and core functions being constantly enhanced.

The decade has also been a golden period for HSBC's development in China, according to Mark Wang, deputy chairman, president and chief executive officer of HSBC Bank (China) Co.

He said the bank has seen its business scale and range of services continue to expand while its total assets have nearly doubled. It has stayed profitable and constantly created jobs for local talent.

Wang spoke highly of the city's efforts to promote financial opening up, citing the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone as an example.

The Lingang New Area, since its establishment three years ago, has achieved fruitful results in pioneering high-level opening up, and created great opportunities for the participation of domestic and foreign banks in innovation and development.

In particular, on Lingang's track toward completing its opening-up goals of facilitating overseas investment and business operations abroad, free and easy entry and exit of goods and the facilitation of capital flows, it has brought new development opportunities for HSBC which is known for its strength in cross-border services, Wang noted.

In fact, HSBC Bank's Lingang branch opened for business in September, which is deeply integrated into the group's global service network.

From the Stock Connect schemes to the Shanghai Stock Exchange STAR Market with the pilot registration system, from the initiation of the pilot FTZ to its Lingang area, Shanghai has continued to innovate and promote financial opening-up at a higher level.

Citing these efforts of the city, Wang believed Shanghai's international influence as a financial center will further strengthen in the coming years, offering foreign financial institutions space to flourish.

"We are confident in Shanghai's growth prospects, and will continue to serve economic development here."

The group plans to further invest and develop in the Chinese market, with an expected investment exceeding 3 billion yuan (US$413 million) in the 2020-2025 period, according to Wang.

Meanwhile, United Overseas Bank, since settling in Shanghai in 1999, has witnessed the stable development of China's economy, high-level openness, and the transformation of the development pattern, which "gives us confidence to put roots down here in Shanghai," the Singapore bank said.

Foreign firms reaffirm belief as Shanghai evolves into a global financial hub

Stable development of China's economy, high-level openness and the transformation of development pattern have given UOB solid confidence to put roots down in Shanghai.

"From the internationalization of the yuan, foreign exchange reforms, the Belt and Road Initiative, and construction of the Guangdong-Hong Kong-Macau Greater Bay Area and the Pudong Pioneer Area and Lingang area, to the introduction of the 'dual carbon' targets and implementation of the Regional Comprehensive Economic Partnership (RCEP) – each of these steps is extremely encouraging and beneficial to companies like us, who are committed to long-term and sustainable development in the Chinese market."

At the same time, its business has been booming, with revenue of UOB China growing at a compound annual rate of 13 percent since its establishment as a locally incorporated bank in 2008.

In May this year, UOB China announced that it would be the first foreign bank to set up a presence in Lingang New Area, which opened for business in September.

The bank will take offshore finance as the entry point to create innovative financial solutions, aiming to meet the needs of corporate development as well as support the construction of Lingang and the Shanghai International Financial Center, it said.

Shanghai also continuously promotes financial technology innovation, as empowering finance with digitalization has become a must for the transformation of the financial industry.

As a foreign bank, UOB is focusing on various fin-tech application scenarios and opportunities in cross-border businesses, based on the deeper interconnectivity between China and the Association of Southeast Asian Nations, or ASEAN, and is actively participating in the digitalization process of cross-border finance in Shanghai.

AXA, a global leader in insurance, has also remained steadfast in its long-term commitment to China since its 1999 entry into the Chinese market, which is the world's second-largest insurance market.

Foreign firms reaffirm belief as Shanghai evolves into a global financial hub

Global insurance giant AXA remains steadfast in its long-term commitment to the China market since its 1999 entry into the country.

Shanghai, with a vibrant economy and clear overall competitive advantages, ranks first in China in terms of the scale of insurance asset management products, asset-backed plans and special products issued and managed, AXA pointed out.

The city is one of the preferred locations for many multinational companies to set up their regional headquarters, and is also home to the headquarters of AXA Tianping, the only wholly owned property insurance subsidiary of AXA Group.

Through 25 branches and 3,000 service outlets in 20 provinces across China, AXA Tianping now provides insurance products and services to more than 3.3 million Chinese households and corporate customers.

Speaking of its headquarters in the core area of Lujiazui, it said the group chose the location due to a large number of opportunities there for the banking and insurance asset management industries to build cross-industry collaboration amid the ever-changing environment in this era.

Especially for the insurance asset management industry with the trait of long-term investment and capability to allocate larger-scale assets, businesses can leverage the digital capabilities and rich channels of its peers to more easily and efficiently reach consumers and provide targeted services, according to AXA.

"As more and more multinational companies gather in Shanghai, a new financial ecosystem is being set up, which, coupled with an ever-optimized business environment and reforms of industry regulations, will drive the business to thrive in the city."

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