Press Release for January 22, 2019 Media Briefing by the Shanghai Municipal People’s Government
January 23, 2019
The Information Office of the Shanghai Municipal People’s Government held a press conference today (January 22). Xu Zhong, director of the research bureau of the People's Bank of China, and Zheng Yang, director of Shanghai Financial Services Office, introduced the main contents of the Action Plan for Shanghai’s Construction of International Financial Center (2018-2020) and the main measures to implement the plan.Jin Penghui, deputy director of the Shanghai Headquarters of the People's Bank of China, Yan Bojin, director of the Shanghai bureau of the China Securities Regulatory Commission, and Zhang Guangping, inspector of the Shanghai bureau of the China Banking and Insurance Regulatory Commission, made relevant introductions for the plan.
On January 17, 2019, with the consent of the State Council, the People's Bank of China, together with the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, the China Banking and Insurance Regulatory Commission, the Securities the China Securities Regulatory Commission and Exchange Commission and the State Administration for Foreign Exchange, jointly issued the Action Plan for Shanghai’s Construction of International Financial Center (2018-2020). The plan elaborates the guiding ideology, development goals and main tasks for building Shanghai into an international financial center from 2018 to 2020. The publication of the plan marks that the project has entered a sprint stage. It provides an important guarantee, direction and path for the realization of the strategic goal of building Shanghai into a global financial hub by 2020 as scheduled.
The action plan proposes that the overall goal of the project is to basically establish a global financial market in Shanghai by 2020, which is dominated by yuan-denominated products and has strong financial resource allocation and radiation capabilities. The city is supposed to set up an innovative, efficient and transparent financial service system with a rule of law. Shanghai should by 2020 be built into an international financial centre that is in line with China's economic strength and yuan’s role in the international market and it should be among the global top financial centers.More specifically, Shanghai strives to achieve the following three goals:Firstly, it aims to enhance the degree of its financial internalization and its global influence, attract more overseas investors to participate in its financial market, expand the scale of international bond issuance as well as the trading scale of foreign exchange by 2020.Secondly, the city hopes to further improve its financial service function by encouraging more direct financing, especially equity financing and improve relevant arrangements for making cross-border yuan payment and settlement. Thirdly, Shanghai is aimed at further optimizing its business climate for the financial sector. By 2020, the talent structure should be optimized within the financial industry, the city’s competitiveness should be strengthened in the global financial world and its capabilities for financial supervision and risk prevention should be enhanced.
Focusing on these goals, the action plan expounds the main tasks and measures of constructing Shanghai into a global financial center from 2018 to 2020 from six aspects. First, the city should accelerate financial reform and innovation and strengthen the linkage between the construction of the China (Shanghai) Pilot Free Trade Zone and the construction of the city into an international financial center. Second, Shanghai should improve the functions of financial markets and enhance the ability and influence of financial resources allocation. Third, the city should improve relevant systems for the financial institutions and enhance its capabilities of making financial innovations and offering comprehensive services. Fourth, Shanghai should focus on national development strategies and leverage more financial support to the real economy. Fifth, the city should expand financial open-up and international cooperation and enhance its global influence as a financial center. Lastly, Shanghai should optimize the business climate for the financial sector and maintain financial security and stability.
In order to achieve the development goals and tasks proposed in the action plan, Shanghai will implement the action plan in the next few years in five aspects including further opening-up, deepening innovation, resource allocation, market development and risk control. Shanghai will strive to become a center of international finance by 2020 which is compatible with its economic strength and the international status of yuan.
First, efforts will be made to expand opening-up and enhance global influence of financial center. Shanghai will actively implement the country’s new round of financial services industry expansion and opening-up to promote financial opening-up to a greater extent and in a larger scale, in order to enhance its global influence as a financial center. The city will gather and foster a number of asset management institutions with great market influence in order to establish a global asset management center. Shanghai aims to become a global asset-management center by encouraging governments, financial institutions and enterprises of countries along the Belt and Road to issue yuan bonds in the city to build a service center for making cross-border investment and financing.
Second, the city will deepen reform and innovation. Shanghai will further strengthen its efforts in financial reform and innovation as well as implement three new major tasks assigned by the Party Central Committee to Shanghai. The city will improve the financial plan of the new section of the Pilot Free Trade Zone and enhance the functions for the account of free trade. The city will fully cooperate with the China Securities Regulatory Commission and the Shanghai Stock Exchange to promote the pilot of the science and technology board and the registration system, deepen the financial cooperation in the Yangtze River Delta region and accumulate experience for reform and innovation in the finance sector.
Third, Shanghai will allocate resources and improve the system to enhance the competitiveness of the finance industry. The city will actively attract all kinds of headquarters and functional financial institutions to gather and develop here, in order to accelerate the development of a complete and well-functioning financial institution system. The city will also promote more international financial organizations to settle in Shanghai to enhance its financial competitiveness. The city will strive to become a financial technology center to build a financial technology industry ecological chain to attract financial technology companies to Shanghai. The city will endeavor to construct an international insurance center by setting up a reinsurance underwriting community and an operation platform for the Belt and Road Initiative.
Fourth, the city will strengthen market functions as well as allocate high-quality development of resource and services. The city will enhance its ability of to allocate global resources in Shanghai's financial market. Shanghai will also promote higher levels of financial market development, accelerate innovation in products and tools, promote economic transformation and structural upgrading and provide high-quality services. The city will strive to build a yuan asset pricing and payment clearing center. The city will continuously improve the financial market system and infrastructure, give full play to the advantages of Shanghai's financial market and accelerate the innovation of products and tools in the financial market to meet the diversified needs of the market.
Fifth, the city will take efforts to prevent and control financial risks, maintain safety and create a leading business environment. Shanghai always put the prevention of financial risks in a prominent position, prevent and resolve major financial risks, provide important guarantees for the development of Shanghai's international financial center and maintain safety to create a leading business environment. The city will build itself into a financial risk management and pressure testing center. Shanghai will strive to test a number of measures first, including financial products, technology applications, mechanism innovation and important financial reform measures. The city will accelerate integration with the international standards as well as build a financial law and innovation highland with financial talents in order to form a world-class excellent financial ecosystem.
Shanghai has achieved important progress in recent years concerning the construction of a global financial center to serve China’s economic and social growth and its financial reform and opening-up to the outside world, which consolidates its position as a financial center with relatively comprehensive financial market system and with certain international influence.
First is that Shanghai has basically set up a financial market system, making it one of the cities that have the most comprehensive financial sectors including stocks, bonds, currencies, foreign exchanges, gold, futures, bills, insurance and etc. In 2018, the overall transaction of Shanghai financial market increased 15.2 percent to 1645.8 trillion yuan, and more than 85 percent of China’s direct financing came from Shanghai. Second is that the framework of Shanghai’s financial institutions has improved and makes the city an important hub for foreign and domestic financial companies. In 2018, there were 1,605 financial institutions in Shanghai, and 68 of them were new comers. Third is that Shanghai’s financial opening up process has continued to accelerate, making it at the frontline in the Chinese mainland concerning financial internationalization. Foreign financial institutions accounted for nearly 30 percent in Shanghai’s total financial institutions, while the city kicked off Bond Link, Shanghai-Hong Kong Link, crude oil futures and gold international board one after another; at the same time, interbank bond, foreign exchange, currency and other markets were furthered opened to the outside world. Fourth is that Shanghai’s financial reform and innovation has kept to go deep, making the city a pioneer in China’s financial reform and innovation. Over many years, China has greatly supported Shanghai to take the lead in experimenting pilot financial programs by launching a series of innovative measures, which served as a test stone for the country’s financial reform. In the past five years after the establishment of China (Shanghai) Pilot Free Trade Zone, Shanghai has released 110 innovative financial cases in nine batches, with more than 20 measures being duplicated and expanded in the country. Fifth is that Shanghai’s financial environment has been optimized continuously, making it one of the cities in China with the best environment for growth of the sector. Shanghai has seen the establishment of Shanghai Financial Court, Shanghai Financial Dispute Mediation Center, Financial Arbitration Court and etc. It also launched a platform to offer services of credit information, and the influence has been enhanced in Lujiazui Financial City and the financial agglomeration areas along the Huangpu River. The Lujizui Forum, which has been held for 10 years, has become a premium financial forum with important influence both home and abroad. In 2018, the output of Shanghai’s financial sector rose 5.7 percent to 578.16 billion yuan, which accounted for 17.7 percent in the city’s total economic output, or 8.4 percent of China’s financial sector, ranking the top in the country. In the latest Global Financial Center Index (GFCI), released in September of 2018, Shanghai moved up to fifth notch across the world.
Shanghai will well implement the action plan with clear division of responsibility to fulfill the three missions delivered to Shanghai by President Xi Jinping and to create a good business climate for the implementation of the plan. Shanghai will host a meeting soon for the relevant working group to accelerate the construction of Shanghai as a global financial center and deploy tasks in the action plan. Meanwhile, Shanghai will strengthen communication with related nation-level departments to earn more opportunities in trialing programs of financial reform and innovation with better measures and policies, in a bid to ensure the realization of the goal for the construction of Shanghai into an international financial center.