Shanghai's financial industry takes lead in opening-up
High-quality growth, the most-mentioned phrase during the Two Sessions, will keep guiding China's new route of development. As a bellwether city, Shanghai takes a model role in mapping out growth of high quality, and here is what we find in different sectors of our life.
Shanghai's financial industry has been making large strides in terms of quality development, with banks and financial institutions taking the lead in promoting innovation and efficiency, and a special focus put on high-quality opening up.
The Shanghai Banking Association, under the guidance of the Shanghai Office of China Banking and Insurance Regulatory Commission, has played a vital role in this progress, guiding its member units to promote innovation and development in the field of offshore trade.
The association has been instrumental in coordinating with foreign banks to support the Belt and Road Initiative. Several foreign financial institutions were organized by the Association to conduct research in the Hainan Free Trade Port, providing a platform for international cooperation and exchange.
Meanwhile, domestic banks such as the Bank of China, the Industrial and Commercial Bank of China, and the Shanghai Pudong Development Bank, have been working towards the high-level opening-up of the financial industry in Shanghai.
The Bank of China's Shanghai Branch, for example, leverages its global operation advantage to assist Shanghai's foreign trade and accelerate the construction of a new development pattern with financial strength. With practical and effective measures, it aims to become a pioneer in high-level financial services for opening up and innovative development.
In March of this year, the branch released its financial service plan to support the cross-border use of the renminbi by businesses, which focuses on various scenarios for RMB cross-border use, including capital settlement, fund financing, online electronic products, and characteristic products of the Free Trade Zone.
It has also signed "Cross-border RMB Financial Service Agreements" with nearly 10 enterprises in the shipbuilding, international trade, professional technology, high-end equipment manufacturing, bulk commodities, construction engineering, medicine and technology industries, to provide strong support for RMB cross-border use in various scenarios of enterprises.
Up to now, the branch has provided various cross-border RMB settlement facilitation services for more than 2,700 enterprises; completed the first offshore processing and trade business under the Shanghai Free Trade Account offshore economic and trade business; and provided enterprises with its service solution combining cross-border RMB facilitation and corporate online banking, which achieves paperless and online cross-border trade settlement and domestic capital use.
The Shanghai Branch of Industrial and Commercial Bank of China, meanwhile, is fully committed to serving the construction of the Shanghai International Financial Center and Shipping Center.
It has helped with the orderly promotion of RMB internationalization. The cross-border RMB settlement volume of the current account increased by over 20 percent year on year, empowering the Yangtze River Delta and using institutional linkage advantages to provide overseas RMB financing services for businesses "going overseas" from the Delta region.
The Shanghai Pudong Development Bank is also promoting cross-border RMB payment services to expand RMB cross-border settlements. As of the end of May 2023, the import and export payment scale of the bank's Shanghai branch reached 3.52 billion yuan (US$490 million).
Cross-border RMB import and export payment services further facilitate the use of RMB in cross-border trade and investment, better meeting the market needs of foreign trade and economic enterprises in terms of transaction settlement, investment and financing, risk management, and more. At the same time, it reduces enterprise exchange rate costs, avoids exchange rate risks, and effectively enhances the ability to serve the real economy, comprehensively promoting the high-quality development of cross-border RMB business.
The development of Shanghai's financial industry is critical to the city's goal of becoming an international financial center. It has been working towards creating a favorable business environment for financial institutions, with supportive policies and regulations in place.
At the 14th Lujiazui Forum held in Shanghai earlier this month, a major event for China's financial industry, Li Yunze, administrator of the National Financial Regulatory Administration, emphasized that China will always adhere to the policy of opening up its financial industry to the world.
The financial industry's opening-up will be relentlessly expanded as time goes on, he said. The country will make further efforts to both introduce foreign institutions and support domestic ones to expand overseas. It will steadily promote high-level opening-up of the financial industry, and continuously create a market-oriented, law-based and internationalized business environment.
Over recent years, China has launched more than 50 measures on the opening-up of the financial sector, lifted foreign shareholding restrictions, and greatly reduced quantitative barriers to foreign access.
It will continue to optimize cross-border financial services and vigorously support the development of the Belt and Road Initiative. Also highlighted was the need to continuously optimize financial services to better serve the real economy.
The high-quality development of Shanghai's financial industry is not only essential for the city's economic growth but also for the country's financial system. As China's financial center, Shanghai's progress will have a significant impact on the country's financial industry's overall development.