From June 8th to 9th , the 14th Lujiazui Forum was held in Shanghai. This year's theme is "Global Financial Opening and Cooperation: A New Power to Guide Economic Recovery" . Here, it is expected to collide with new ideas and new suggestions on promoting global economic recovery and financial stability, and promoting China's financial reform and opening up. At this time, it is also necessary to look back at the new progress of Shanghai in building an "upgraded version" of an international financial center over the past year or so.
From supporting the development of the offshore bond market in the Free Trade Zone, to gathering Chinese and foreign financial institutions, and expanding the business network of the RMB cross-border payment system, these practices have given Shanghai International Financial Center more international connotations. Looking into the future, how will Shanghai further build an "upgraded version" of an international financial center?
linking multiple regions to create a highland for REITs development
Over the past year, Shanghai has taken advantage of its capital market advantages to jointly build REITs (Real Estate Investment Trust Fund) highlands.
On May 30 , 2022 , the Yangtze River Delta Infrastructure REITs Industry Alliance was established . On March 28 , 2023 , the Yangtze River Delta G60 Science and Technology Innovation Corridor Public Offering REITS Alliance was established.
" REITs are a particularly important financial product. I think its importance is becoming more and more important now. The reason is that it is aimed at financing the real estate industry. Now that real estate has entered a new stage, there are many stock assets. These How to bring in more funds from the capital market to revitalize assets is very important."
Hu Jie, a professor at the Shanghai Advanced Institute of Finance at Shanghai Jiaotong University, said that as far as Shanghai is concerned, this field should naturally be at the forefront.
If the REITs move faster, it will indeed be able to become the center of the country in this product line in the next stage of development. The REITs alliance is mainly a mechanism for communication and cooperation within the industry. From the perspective of building an international financial center, REITs themselves are also an important category.
Yan Hong, academic associate dean of Shanghai Advanced Institute of Finance of Shanghai Jiaotong University and professor of finance, said that the development of the REITs market is still relatively vigorous. As an emerging asset product in China's capital market, REITs are of great significance to the integration and development of the entire real estate industry.
If Shanghai can link multiple regions to create a highland for the development of REITs , it can make full use of the advantages of Shanghai's capital market, revitalize the stock assets of the real estate industry through the capital market, and promote the transformation and upgrading of the industry. This is conducive to enriching the types of products in the capital market, increasing the scope of asset allocation, and making Shanghai, as an international financial center, able to cover more complete asset classes.
Actively develop the offshore debt market in the Shanghai Free Trade Zone
In 2022 , Shanghai will support the issuance of offshore bonds in the free trade zone, and realize the implementation of innovative businesses such as the first ABS in the free trade zone , the first green ABS , and the first bond issued by the standby letter of credit.
Qiao Yide, vice president and secretary-general of the Shanghai Development Research Foundation and an expert at the International Finance and Economics Research Expert Studio of the Ministry of Finance, said, "Offshore debt can be said to be a step forward. The liquidation and custody of offshore debt is in our country. Its own agency, ChinaBond, is listed on it, and offshore bonds are good for the internationalization of the renminbi. Although offshore bonds can also be issued in US dollars, the currency that is more commonly used now is renminbi.
Due to the cross-border use of renminbi, there may be some renminbi overseas, and overseas renminbi can be invested in offshore bonds, which can promote the cross-border flow of renminbi, which is good for promoting the internationalization of renminbi and the free flow of cross-border funds. At the same time, encouraging the development of third-party payment platforms overseas will also help the internationalization of the RMB and the flow of funds. "
Yan Hong said that the development of the offshore bond market itself is very important for the internationalization of RMB and the operation and investment of offshore RMB.
Putting the offshore bond market in the Shanghai Free Trade Zone can not only realize the offshore function, but also enable Shanghai's financial institutions to participate in the construction and operation of the entire market, which plays a very important role in the construction of Shanghai's international financial center. support and propulsion.
Yan Hong suggested that the construction of the offshore bond market in the Shanghai Free Trade Zone can refer to some tried-and-tested practices of the corresponding international offshore bond market.
"Refer to international best practices to avoid detours, extensively strengthen the international cultivation of our financial institutions, so that they can be more competitive in the international market, and also make our offshore bond market more international and more attractive to overseas investors. Investor participation."
Hu Jie believes that through offshore bonds, Chinese companies can issue bonds to raise foreign capital, which is a specific measure to attract foreign funds to flow to domestic projects through the Shanghai International Financial Center, and should be vigorously developed.
Zhong Huiyong, associate professor of the School of Finance at Shanghai University of International Business and Economics and deputy director of the Institute of Financial Development, said that the development of the offshore bond market in the free trade zone can increase Shanghai's international financial transactions and business, attract domestic and foreign companies and institutions to issue bonds in Shanghai, and provide Diversified financing channels.
Zhong Huiyong pointed out that the development of the offshore bond market in the free trade zone can also attract more international investors to participate in Shanghai's financial market, help increase capital inflows, and promote the depth and breadth of Shanghai's financial market.
He suggested that Shanghai should strengthen cooperation and communication with domestic and foreign financial regulatory agencies, and promote regulatory coordination and cooperation in the offshore bond market in the Free Trade Zone. "This helps to improve the transparency and stability of the market, reduce potential risks and enhance investor confidence."
More Chinese and foreign financial institutions gather in Shanghai
On January 19 , 2023 , 6 newly established wholly foreign-owned public fund companies (BlackRock, Manulife TEDA, Neuberger, Fidelity, Schroeder, and China International Investment Morgan) all settled in Shanghai .
On February 28 , 2022 , seven Chinese and foreign-funded institutions held a collective unveiling ceremony, including Schroeder Bank of Communications Wealth Management Co., Ltd., the Shanghai Branch of the First Abu Dhabi Bank of the United Arab Emirates, the Agricultural Bank of China Co., Ltd. Fund Operation Center, China Merchants Fund Operation Center of Bank Co., Ltd., Private Banking Department of Industrial Bank Co., Ltd., Capital Operation Center of Hengfeng Bank Co., Ltd., CPIC Technology Co., Ltd., etc.
"The establishment of a number of bank fund operation centers in Shanghai is particularly good for promoting the construction of Shanghai as an international financial center." Hu Jie said, especially the fund management of some multinational companies is a relatively complicated business. If the fund management center is placed in the Shanghai will be integrated into the entire financial system of our country and become a member of the system.
Yan Hong said that there are now so many wholly foreign-owned public offering fund companies settling in Shanghai, and the fund operation centers of many banks have been unveiled, which has given more international connotations to the construction of Shanghai as an international financial center.
"According to our survey of foreign asset management institutions a few years ago, it is the general trend for them to land in Shanghai, and it is also an attractive place for Shanghai as an international financial center. But on the other hand, they also face some difficulties and difficulties in business development. .
Therefore, in order for these wholly foreign-funded financial institutions to conduct business well in China, it is necessary to introduce some international business development facilities so that they can enjoy the same rights and interests as domestic financial institutions, which is conducive to their better business development and a strong presence in the market. It can compete fairly, and at the same time make the mainland market and the offshore market in the free trade zone more international and modern, enhance the ability of our financial institutions to participate in international competition, and further deepen the connotation of an international financial center. "
Joyd said that the biggest difference between the international financial center and other general financial centers is that it is actually a hub or center for the allocation of global financial resources.
Qiao Yide pointed out that the international financial center needs to have a large number of financial institutions, and the business of such financial institutions is not only for domestic, but also for cross-border business, so that it is in line with the definition of international finance.
"In this sense, the establishment of a number of wholly foreign-owned public offering fund companies and the inauguration of a number of bank fund operation centers in Shanghai are useful for the construction of Shanghai's international financial center, because these institutions have many channels abroad and sources of funds, and Analyze or operate transnational financial experience or products. I believe that more foreign financial institutions will land in Shanghai in the future.”
Qiao Yide suggested that we can encourage my country's large financial institutions and state-owned banks to move to Shanghai, or encourage their international business headquarters to come to Shanghai to participate in the allocation of global financial resources.
The business network of the RMB cross-border payment system is getting bigger and bigger
In the past year, the payment and settlement system has been continuously improved. The RMB Cross-border Payment System ( CIPS ) business basically covers the world's major economies. In 2022 , it will handle 4.4004 million transactions with an amount of 96.70 trillion yuan.
Hu Jie said that CIPS plays a very important role because it is an operational hub for the internationalization of RMB, which is equivalent to the general bus dispatching station. The cross-border settlement of RMB is basically through CIPS . In terms of business indicators, it has obviously made very obvious progress. It is constantly increasing the transaction volume and access institutions, covering almost all countries in the world, and its business network is getting bigger and bigger.
Joyd pointed out that an international financial center should have relatively good cross-border financial infrastructure. CIPS is not a message system, but a RMB clearing system. He suggested that we should continue to expand the participants of CIPS .
"With the further use of RMB overseas, I believe that the participants of CIPS will be expanded to all aspects of the world. In addition, some advanced technical means should be absorbed to improve the clearing efficiency and convenience of CIPS and reduce the cost of use .”
Joyd believes that another necessary condition for becoming an international financial center is the free flow of cross-border funds. He suggested that the free trade zone should carry out more pilot projects of offshore finance, and the establishment of Shanghai International Financial Assets Trading Center should be accelerated.
In addition, the Shanghai Stock Exchange can also try to establish an international board, so that foreign assets can be listed on the Shanghai Stock Exchange, which can promote capital flow and bring our financial opening to a higher level. With you" is very necessary in the current complicated situation, and it also allows Chinese investors to share the operating profits of foreign companies.
Hu Jie said that in the long run, the most important thing is to move steadily towards the free convertibility of RMB step by step. The renminbi is actually a relatively good head currency, with relatively large economic support and a large trade volume.
The Science and Technology Innovation Board further enhances Shanghai's market position as a gathering place for trading financial resources and elements
The Science and Technology Innovation Board is about to usher in its fourth anniversary. As of May 31 , 2023 , 528 companies have been listed on the Science and Technology Innovation Board , with a total of 822.36 billion yuan in initial offerings and a total market value of 6.7 trillion yuan.
Hu Jie said, "The Science and Technology Innovation Board is equivalent to the NASDAQ of the United States. It is very important for this type of special science and technology enterprises. Now it can move forward step by step and continue to improve. It is very important for the whole Shanghai to become China's real An international financial center is very important."
Yan Hong said that the development of the Science and Technology Innovation Board in Shanghai and its success as the first pilot of the registration system have further strengthened and enhanced Shanghai's market position as a gathering place for trading financial resources and elements.
"A resource trading center like this is a very important symbol for Shanghai as a financial center with capital market pricing mechanisms and capabilities. Because if it becomes a pricing center for financial products, it can also form the basis of a global asset management center. Asset management institutions are also willing to gather more in such centers to form a gathering place for asset management institutions.”
Source of information: Shanghai Research Institute
