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Shanghai’s bridgehead role and its action plan for the Belt and Road national strategy

Oct 31, 2017

The Shanghai Municipal Government’s Information Office held a press conference on October 11 on Shanghai’s bridgehead role and its action plan of serving the Belt and Road national strategy. Following are the highlights:

 

Tang Zhiping, deputy secretary general, Shanghai Municipal Government, and director, Shanghai Development and Reform Commission

Wang Sizheng, inspector, Shanghai Development and Reform Commission

Li Jun, deputy director, Shanghai Financial Service Office

Fu Guoqing, chief engineer, Shanghai Science and Technology Commission

Shen Weihua, deputy director, Shanghai Commerce Commission

STV: I have a question for secretary general Tang. In recent years, Shanghai has made big progress in the construction of the Belt and Road. What is the relationship between the construction of the Belt and Road by Shanghai to serve the nation and the construction of the ongoing “Four Centers,” pilot free trade zone, and scientific innovation center?

Tang Zhiping: It’s a good question. Actually the government paper makes a brief clarification on the relationship. But since you have asked the question, I will say something about it. The CPC Central Committee has made very clear its requirement on the development of Shanghai: “Shanghai should serve as a leader in reform and opening up in the nation, and also as a leader in innovative development.” It’s what is expected of Shanghai. The construction of the pilot free trade zone is crucial to Shanghai’s role and expanding the opening-up is very important for this construction. In return, expanding the opening-up will push forward reform. The construction of the scientific innovation center is the key to the innovative development of Shanghai. The construction of the “Four Centers” — economic, financial, trading and shipping — has been the pillar of Shanghai’s development since the beginning of the century, and the construction will be completed in 2020. We believe that the strategies are in line with the Belt and Road strategy. President Xi Jinping, speaking at the Belt and Road Forum for International Cooperation in Beijing in May, proposed that the Belt and Road should become a road of peace, prosperity, opening up as well as innovation, and one that connects different civilizations. The five roads in Xi’s remarks are consistent with the strategies of Shanghai.

So the six special actions we briefed you in our Belt and Road action plan have close convergence with the pilot free trade zone, scientific innovation center and the Four Centers national strategies. For example, the special action on trade and investment facilitation echoes the national strategy on constructing the international trade center and pilot free trade zone. Shanghai is actively preparing for the 2018 China International Import Expo, which is an important platform to build the city into an international trade center. It is also one of the 60 concrete measures as well to play a bigger role as an international convention and exhibition platform and to expand the economic and trade relationship with nations and regions along the Belt and Road.

Just now we mentioned the special action of opening up and cooperation in finance, which mainly relies on the construction of an international finance center in Shanghai to further explore the new routes for the internationalization of the RMB and opening up of the financial market. The Shanghai Stock Exchange and the China Financial Futures Exchange have had strategic cooperation with nations along the Belt and Road in areas of finance. Compared with the action plan in 2015, the action plan this time has added two new areas: cooperation of think tanks and scientific innovations. The core is to gather the elements and main bodies of innovation from nations and regions along the Belt and Road to make a dynamic and resourceful environment to help in the construction of the scientific innovation center with global influence in Shanghai.

So in general, the works are related and linked, each helping the other.

China Business News Daily: What are your considerations on the servicing of related enterprises to go outbound and inbound? What are the key measures, especially in financing?

Wang Sizheng: Just now we mentioned that enterprises are the main driving force in the construction of the Belt and Road strategy. We have put forward six special actions and 60 concrete measures. In fact, most of the measures have to do with the practical needs of enterprises involved. In general we are aiming for better development of enterprises so that a win-win situation can be reached. In making the plans we did a lot of research and on-site visits and listened to suggestions and opinions of many enterprises. At the CEIBS we held symposiums with some SMEs. The main problem for enterprises lies in going outbound, including information asymmetry, inconvenience in cross-border fund exchange and shortage of human resources. Other issues include investment risk identification and shortage of coping mechanism. Shanghai needs to set up a comprehensive service system regarding the problems and needs.

For example, information asymmetry is a key problem we hope to solve for enterprises. Thus, we are clear on setting up a comprehensive service platform to promote economic, trade and investment and to provide planning, policies, laws, projects, risk service for main bodies of the market, and provide support for SMEs. To solve the shortage of finance services and inconvenience in cross-border fund exchange, we will work to expand the function of the free trade account of the Shanghai Pilot Free Trade Zone, to provide cross-border fund exchange and to upgrade support for the China Development Bank and the China Export-Import Bank. Meanwhile, we plan to further expand the coverage of export credit insurance, push forward the setting up of financial asset-management company and credit rating institution on the Belt and Road to solve investment risk identification problem. We plan to upgrade the training of talents for cross-border operation. We also plan to set up more platforms to provide a better business environment to accelerate the construction of the Belt and Road, thank you!

Li Jun: Thank you very much for your question. As an important aspect of the construction of the Belt and Road, finance service should provide strong support and guarantee for the Belt and Road initiative. We have taken the following three measures so that Shanghai can play its role and function as an international finance center:

First is to focus on the needs of enterprises in order to expand the finance channel of the real economy.

1.Strengthen financing support by traditional financial institutions on the Belt and Road construction, and actively play the role of financial markets.

 

2.Push forward yuan-denominated bonds and securitized products of overseas institutions and enterprises in a stable way, and to support the financing of domestic enterprises overseas at the same time.

3.Support financial institutions to provide service overseas with the implementation of the Belt and Road strategy.

Second is to promote the cross-border use of RMB and currency exchange.

 

1. Improve the percentage of RMB use in trade financing, settlement, clearing, project investment and cross-border loan by integrating the RMB’s internationalization strategy.

 

2. Strengthen the strategic cooperation with overseas RMB offshore markets to attract central banks, sovereign wealth funds and investors to invest in RMB assets in China.

3. Support the construction of cross-border payment system of the RMB to provide security on cross-border RMB settlement.

Third is to strengthen financial cooperation to boost financial support.

1. Strengthen the connection with major financial centers along the Belt and Road as well as international financial institutions to deepen exchange and cooperation

2.Set up a coordination mechanism on cross-sector financial service to support enterprises to go overseas, set up green channels to speed up working procedure for enterprises joining construction for the Belt and Road initiative.

3.Learn from the experiences of Hong Kong and Singapore on free trade harbor to support the construction of free trade zone in Shanghai. Thank you for your question!

Eastday.com: Six measures for the action plan of scientific innovation have been put forward in Article 4. What scientific cooperation and platform construction projects have been launched in accordance with the action plan? According to Article 4, the city will promote scientific exchanges and offer financial support to 400 young scientists moving to Shanghai, could you give us some details?

Fu Guoqing: The Shanghai Science and Technology Committee has launched a special action plan in response to the country’s Belt and Road Initiative. In the next five years, we will organize international exchange programs for excellent youth scientists and build joint labs with Belt and Road countries. Cooperation in scientific projects will also be promoted.

The action plan will be implemented in the following six aspects: Constructing the Belt and Road Technology Transfer Center, strengthening cooperation with scientific industrial parks in Belt and Road countries and regions, establishing joint laboratories and research centers, opening big scientific facilities in these countries and regions, promoting technological exchanges and deepening cooperation in maritime science and technology.

In August, we launched the exchange program of excellent youth scientists and the construction of joint laboratories. The program has been hailed by youth scientists and research institutes in Belt and Road countries. This year, we have received 90 applications for the exchange program and 32 applications for joint lab projects submitted by renowned scientists, universities and research institutes in Shanghai.

To build the science and technology cooperation platform, we have supported the construction of the “Belt and Road Science and Technology Innovation Alliance” launched by Shanghai Jiao Tong University. On September 23, the first alliance summit was held to establish an industry-university-research exchange and cooperation platform for alliance members, including universities, research institutes and enterprises in Belt and Road countries.

Xinmin Evening Post: Unimpeded trade is an important part of the economic trade cooperation. Could you give us some details of economic trade between Shanghai and “Belt and Road” countries? What measures will be taken to deepen the economic trade cooperation?

Shen Weihua: The yearly trade volume of Shanghai remains steady at 500 billion yuan. In August, the volume increased 20 percent year-on-year to 428.5 billon yuan. The trade volume has kept growing in the last three years and the amount of investment from Belt and Road countries and regions continues to increase. In the first three years, our investment in these countries totaled US$4.5 billion. Investment and trade have become major driving forces to deepen economic cooperation between Shanghai and those countries.

The action plan has detailed requirements for trade investment facilitation, which mainly include the construction of eight functional platforms for trade and investment promotion. Besides, support should be offered to bridgehead construction in the aspects of institutional innovation, resources allocation, trade distribution and cooperation strengthening.

The first of the eight trade investment promotion platforms is the institutional innovation platform. On one hand, the platform will help the city catch up with global competition and national requirements of Belt and Road construction. On the other hand, a batch of rules and institutions in line with international standards has been drafted during the implementation of the pilot programs of Shanghai Free Trade Zone in the last four years, which lays a foundation for the future free trade negotiation with Belt and Road countries.

The second is the international exhibition platform. Every year, Shanghai holds 880 international exhibitions, totaling 16 million square meters of exhibition area and ranking first among cities around the globe. The 2018 China International Import Expo will further improve the popularity of Shanghai’s exhibition industry. Besides, 11 among the world’s Top 100 exhibitions are held in Shanghai. The city is undoubtedly a promotion platform for Belt and Road exhibitions.

The third is the trade facilitation platform. New modes of cooperation and communication will be discovered with the support of the free trade zone platform. We will improve the level of trade facilitation jointly with Belt and Road countries in information exchange, mutual recognition of supervision and assistance in law enforcement between E-ports.

The fourth is the platform for direct commodity trade. Imported consumer goods in Shanghai accounted for one thirds of that of the country. The city is now an important collection and distribution center for imported vehicles, alcohol, cosmetics and medicine. Meanwhile, an exhibition hall showcasing commodities from countries in eastern Europe has been established as a platform for direct commodity trade.

Fifthly, we will develop a cross-border service trade platform to promote the joint development of the commodity and service trade in Shanghai and Belt and Road countries taking advantage of the rich cultural resources and Chinese medicine resources.

The sixth is the international cooperation platform for productivity. Shanghai sees prospects of a broad cooperation with Belt and Road countries in two-way investment, joint construction of industrial parks, productivity cooperation and engineering contracting. The platform will play an active role in the new round of global industrial layout.

The seventh is the economic trade and investment promotion platform. We will make innovations on public service system for trade investment, build comprehensive investment promotion institutes and public information service platforms, and launch all-dimensional cooperation with Belt and Road countries.

The eighth is the capacity building platform. In the past three years, we have trained more than 15,000 cross-border business operation talents and promoted talent exchange with other countries. Next, we will build “four beams and eight columns” of “Belt and Road bridgehead” through institutional innovation, resource allocation, trade distribution and cooperation promotion.