The External Communications Office of the CPC Shanghai Municipal Committee on the afternoon of October 11 held the eight media briefing of the Party Committee special-series press conferences on the theme “forging ahead in a new journey and make contributions in a new era.” With a theme of　“Achievements and Prospects of the Construction of Shanghai International Financial Center in the New Era,” officials introduced the developments of Shanghai International Financial Center　since the 18th National Congress of the Communist Party of China.　Xin Yadong, Secretary of the Party Committee of Financial Work in Shanghai, Sun Hui, Party Committee Member and Deputy Director of the Shanghai Headquarters of the People’s Bank of China, Liu Qi, Party Committee Member and Deputy Director of Shanghai Banking and Insurance Regulatory Bureau, and Wang Dengyong, Party Committee Member and Deputy Director of Shanghai Securities Regulatory Bureau attended the press conference and answered reporters. Ask questions.

(I)

The construction of Shanghai as an international financial center is a major national strategy proposed by the CPC Central Committee and the State Council from the perspective of the country’s reform, opening up and socialist modernization drive. In 2020, Shanghai was basically built as an international financial center commensurate with the country’s economic strength and the international status of the RMB, laying a solid foundation for a comprehensive upgrade of its role and capacity.

In the past decade, the structure of Shanghai’s financial market has been increasingly improved, and the core functions of the financial center have been continuously enhanced. The financial market and financial infrastructure system have been more established. With the strong support of the national financial authorities, several financial markets and financial infrastructure including Shanghai Commercial Paper Exchange, Shanghai Insurance Exchange, Cross-border Interbank Payment System, China Trust Registration Company, the Shanghai Headquarters of China Central Depository & Clearing Co., Ltd., and City Commercial Banks Clearing Co have been newly established. The city’s ability to allocate RMB financial assets has been continuously enhanced, and Shanghai’s cross-border RMB business settlement accounted for about 50% of the national total. The total turnover of Shanghai’s financial markets has increased from 528 trillion yuan in 2012 to 2511 trillion yuan in 2021. The scope of “Shanghai Price” has been continuously expanded, covering stock indices, foreign exchange, interest rates, major commodities, etc. The international influence of prices such as “Shanghai Gold”, “Shanghai Oil” and “Shanghai Copper” has been increasing gradually.　

In the past decade, Shanghai’s financial reform and opening-up has been further advanced, which has strongly supported the development of the real economy. The Shanghai Pilot Free Trade Zone and the Lingang New Area have played a significant role in the pilot trials of financial opening-up and innovation, by creating the free trade account system, and carrying out the pilot reform of high-level opening-up of foreign exchange management for cross-border trade and investment. New breakthroughs have been made in the connectivity of financial markets. The Shanghai-Hong Kong Stock Connect, Bond Connect and Shanghai-London Stock Connect have been running smoothly. The scale of direct financing continued to expand, and the value of direct financing in Shanghai’s financial markets increased from 3.9 trillion yuan in 2012 to 18.3 trillion yuan in 2021. The coupled effect between the financial center and the science and technology innovation center has been increasing, and the role of the “experimental field” for the reform of the Sci-Tech Innovation Board has been brought into full play. As of the end of September this year, there were 473 companies listed on the Sci-Tech Innovation Board, with total fundraising value of 718.18 billion yuan and a total market value of 5.5 trillion yuan. The innovative application of financial technology has been continuously improved, and the pilot program of digital RMB has been steadily advanced. Shanghai has become one of the key cities to gather domestic and foreign fintech companies. Positive progress has been made in the construction of an international green financial hub, with the establishment of a national carbon emissions trading market and a national green development fund in Shanghai. A number of “first orders” of green financial products and businesses were successfully implemented.　Inclusive financial services have become more diversified. The city has set up a policy financing guarantee fund, kicked off the application of big data for inclusive finance, launched the inclusive financial advisory system, promoted the innovation of bill business, continuously optimized the credit reward and subsidy policy for small and medium-sized enterprises, and supported the development of small and medium-sized enterprises.

In the past decade, Shanghai’s financial institution system has become increasingly established, and the construction of an international financial talent highland has been accelerated. The city has been leading nationwide in financial opening-up. The total number of licensed financial institutions in Shanghai has increased from 1,227 at the end of 2012 to 1,719 at the end of June this year, of which foreign financial institutions accounted for about 30%. Demonstration effect of “first batches” and “first movers” has been more obvious. The construction of the global asset management center has been steadily advanced, and the Shanghai Asset Management Association has been established. The world’s top 10 asset management institutions in terms of assets under management all have presence in Shanghai, and assets under management by public funds and insurers’ asset management units accounted for one-third of the country’s total. The pilot program of Qualified Foreign Limited Partner (QFLP) and Qualified Domestic Limited Partner (QDLP) continued to deepen. Positive progress has been made in the construction of a highland for financial talents, and the “Shanghai Financial Talent” project has been implemented in depth. The number of financial practitioners in Shanghai has reached 470,000.

In the past decade, Shanghai’s business environment in the financial sector has been continuously optimized, and the influence of the financial hub has increased significantly. The construction of the financial rule of law was further advanced, and the country’s first financial court was established in Shanghai. The city has established a professional mechanism for financial investigation, procuratorial and trial systems. The credit and consumer protection system has been continuously improved, and the Financial Consumer Rights Protection Bureau of the People’s Bank of China and the China Securities Investor Services Center have been established. The local financial supervision system has been improved constantly. Local financial supervision and management regulations have been promulgated, and the construction of the local financial supervision information platform has been solidly promoted. The city has established the local (Shanghai) coordination mechanism of the Office of the Financial Committee of the State Council and the Shanghai Municipal Financial Stability Coordination Joint Meeting System to firmly guard against regional and systemic financial risks. The popularity of financial brands has been expanding. The construction of Lujiazui Financial City and the financial agglomeration belt along the Huangpu River has achieved remarkable results and the city’s carrying capacity has been continuously improved. The Shanghai Financial Innovation Award has been presented for 11 sessions, and a large number of outstanding achievements with strong innovation and good demonstration efforts have emerged. Lujiazui Forum has become an important platform for high-end financial dialogue and exchanges between China and the rest of the world.

In the past decade, the Party building in Shanghai’s financial system has been robust, and the political and people-oriented nature of financial work has continued to deepen. The city has adhered to the political nature of financial work, deeply understood the decisive significance of the “Two Establishments” (The Party has established the core position of Comrade Xi Jinping in the CPC Central Committee and the core position of the Party as a whole, and established the guiding position of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era), further enhanced the “Four Consciousnesses” (maintaining political integrity, thinking in big-picture terms, following the leadership core, and keeping in alignment), strengthened the “Four Self-confidences” (road confidence, theoretical self-confidence, institutional self-confidence, cultural self-confidence) and achieved the “Two Upholds” (upholding General Secretary Xi Jinping’s core position on the CPC Central Committee and in the Party as a whole, and upholding the Central Committee’s authority and its centralized, unified leadership).　The city adhered to the Party’s overall leadership over financial work, and ensured that the political position, political direction, political principles, and political path are highly consistent with the CPC Central Committee. The city coordinated and mobilized resources from all parties to guide and guarantee Shanghai’s financial reform and development with the new achievements of comprehensively and strictly governing the Party. The city adhered to the people-oriented nature of financial work, established a people-centered value orientation, met the growing financial needs of the people, effectively protected the legitimate rights and interests of financial consumers, and continuously improved people’s sense of gain, happiness and security.

(II)

Since the 18th National Congress of the Communist Party of China, the Shanghai headquarters of the People’s Bank of China has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, focused on the implementation of the “Three Tasks” of financial work, adhered to the original intention of “finance for the people”, promoted the smooth realization of the basic goal of building Shanghai International Financial Center, and injected fresh vitality into economic and social development.　

In the past decade, the Shanghai headquarters of the　PBOC has adhered to improving services to promote finance so as to benefit enterprises and people, and strongly supported the high-quality development of Shanghai’s economy. From 2012 to 2021, the city’s GDP doubled, from 2.13 trillion yuan to 4.32 trillion yuan, the added value of the financial industry increased from 11% to 18% of GDP, and the total transaction value of financial markets rose nearly 4 times, from 528 trillion yuan to 2511 trillion yuan. It has made efforts to create a business-friendly monetary and financial environment. As of the end of August this year, the outstanding balance of local and foreign currency loans in Shanghai was 10.1 trillion yuan, and the outstanding balance of local and foreign currency deposits was 19.1 trillion yuan, which was 2.5 times and 3 times that of the end of 2012, respectively, and the interest rates of corporate loans and those of small and micro enterprise loans were at record low levels. It gave play to the role of structured monetary policy tools in a targeted way to significantly improve the financing environment in key areas such as scientific and technological innovation, inclusive finance for small and micro companies, and green development. Since statistics were available, the average annual growth rate of high-tech enterprise loans, inclusive loans for small and micro enterprises, and green loans was 19.0%, 32.7%, and 24.1%, respectively, far exceeding the growth rate of local and foreign currency loans in the same period. It continued to optimize the financial business environment, comprehensively cancelled the permit system for opening corporate bank accounts, carried out pilot projects such as unified registration of movable property guarantees, financial technology innovation supervision, and digital RMB, and greatly improved the satisfaction of market entities. It continuously strengthened financial support for the construction of the Belt and Road and enterprises to “go global”, and the cross-border RMB settlement value between Shanghai and countries and regions along the Belt and Road has increased by an average annual rate of 49.6%. It took the lead in the establishment of a high-quality integrated development cooperation mechanism for financial services in the Yangtze River Delta, and continued to the further deepening of regional financial cooperation.

In the past decade, the Shanghai headquarters of the PBOC has adhered to an innovation-driven approach, deepened financial reform and opening-up, and given full play to Shanghai’s role as an “experimental field” for national financial reform. Since its inception, the Shanghai headquarters has solidly performed the national functions entrusted by the PBOC headquarters, including managing interbank market operations, and acting as an agent for overseas central banks, continued to deepen the opening-up of the financial markets, improved the functions of cross-border financial services in local and foreign currencies, and enabled the financial sector in Shanghai to better serve the whole country and the world. It deepened the financial reform of the free trade zone and the Lingang New Area, focusing on the policies issued by the PBOC headquarters to support the construction of the Shanghai Free Trade Zone, such as 30 Financial Reform Measures and 40 Financial Reform Measures to support the construction of the Shanghai Free Trade Zone and 30 Financial Measures to support the construction of the Shanghai International Financial Center and the integrated development of the Yangtze River Delta. It has formulated a series of implementation policies, and launched a raft of pioneering reform projects such as the free trade account, the macro-prudent overseas financing system in local and foreign currencies, and the pilot high-level opening up of cross-border trade and investment in the new area, which have been successively promoted nationwide. As of the end of August this year, Shanghai has had a total of 142,000 free trade accounts and handled cross-border settlements valued at 129 trillion yuan, with an average annual growth of 39%. It has vigorously promoted the opening up of Shanghai’s financial markets to the outside world, and supported the PBOC headquarters for the launch of new models of opening-up such as Bond Connect and the international board for gold. As of the end of August this year, the outstanding balance of interbank bonds held by overseas entities reached 3.5 trillion yuan, which was 4.3 times that of the end of 2016, and the cumulative issuance of panda bonds by foreign entities increased from 4 billion yuan at the end of 2012 to 612.1 billion yuan. It has actively driven the coordinated development between RMB internationalization and Shanghai International Financial Center. Shanghai’s cross-border RMB settlement value has remained the first in the country for 10 consecutive years, with an average annual growth rate of 47.7%.

In the past decade, the Shanghai headquarters of PBOC has adhered to the “bottom-line thinking”, strengthened the prevention and control of financial risks, and ensured no systemic financial risks occurred. It has set up a local coordination mechanism for the office of the Financial Commission. The joint efforts of financial cooperation and risk prevention and control between the central and local financial authorities have been continuously strengthened. Positive results have been achieved in preventing and resolving major financial risks.

(III)

Since the 18th National Congress of the Communist Party of China, the Shanghai Banking and Insurance Regulatory Bureau has always adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, conscientiously implemented the decisions and deployments of the CPC Shanghai Municipal Committee and the Shanghai Municipal Government on financial work, and strongly supported the construction of Shanghai as an international financial center.

First, it continued to consolidate the status of the city as a gateway and hub for financial opening-up. It actively guided foreign-funded financial institutions to settle in Shanghai. At present, there are more than 50 foreign-funded banking and insurance legal-person entities, more than 100 foreign-funded provincial-level branches and 77 foreign-funded banking and insurance representative offices in Shanghai. It actively implemented the state’s major measures to further expand the opening-up of the financial industry, and took the lead in supporting foreign-funded institutions and large banks to set up joint venture wealth management companies in Shanghai. All four foreign-controlled wealth management companies that have been opened so far are in Shanghai. It took the lead in raising the foreign equity limit in life insurance companies from 51% to 100%, and the first three wholly foreign-owned life insurance companies in the country have completed registration changes in Shanghai. The country’s first foreign-funded insurance holding company was also approved to open in Shanghai. The effect of “first batches” and “first movers” of opening up to the outside world reflects Shanghai’s “acceleration” in expanding the opening up of the financial industry.

Second, it further promoted financial reform and innovation. It vigorously promoted pilot programs of reform and innovation. The city pioneered the registration system for shipping insurance products, and took the lead in launching the reform of insurance product registration and management in the country. It created an interactive mechanism for the supervision of innovative business in the free trade zone, and provided case-by-case support for institutional business innovation, with the cumulative amount of support funding exceeding 110 billion yuan. It assisted in the issuance of the Guiding Opinions on Promoting the Construction of Shanghai International Reinsurance Center and the Work Plan of the Science and Technology Insurance Innovation Leading Zone in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone to provide policy support for Shanghai to build a highland of reinsurance and science and technology insurance innovation. It continued to supervise Chinese-funded banking and insurance institutions to strengthen the organic unity of Party leadership and improvement of corporate governance, so as to realize that Party organizations “should be built to the fullest.” It carried out corporate governance assessment of legal-person entities and evaluation of the performance of duties by directors and supervisors. It issued opinions on encouraging five types of non-banking institutions to assign independent directors, and continuously improved the corporate governance system of institutions within the jurisdiction.

Third, it effectively served the development of the real economy. Over the past decade, Shanghai’s banking assets and bank loans have grown by more than 140%.　The insurance penetration increased from 4.08% to 4.56%, and the insurance density increased from 3,421 yuan per person to 7,917 yuan per person, providing strong support and risk protection for the healthy development of the real economy. It supported high-level scientific and technological self-reliance, and established a six-front mechanism for scientific and technological financial services (proprietary organizational structure system, professional management team, dedicated risk management system and technical means, special management information system, special incentive assessment mechanism, exclusive customer credit evaluation standards), which was promoted by the State Council as one of the second batch of measures to support innovative reform. With a focus on key areas such as advanced manufacturing, strategic emerging industries, and the transformation and upgrading of traditional industries, it has increased financial resources, with the loan balance to the manufacturing sector increasing by 96% compared with 10 years ago. It promoted the establishment of the China Integrated Circuit Insurance Alliance, providing protection valued at nearly 700 billion yuan for 12 key integrated circuit customers. It created a metropolitan inclusive finance system, and the average annual growth rate of outstanding inclusive loans to small and micro enterprises across the jurisdiction exceeded 30%.

Fourth, it actively participated in the construction of the people’s city. It deeply practiced the important concept of the “People’s City.” It took the lead nationwide in carrying out and continuously standardizing the audio and video recording on providing risk tips during the sales of bank wealth management products, effectively protecting the legitimate rights and interests of financial consumers. The city set up first private non-enterprise industry dispute mediation center in China, and a total of 34,100 cases have wrapped up mediation. The city has successfully launched the customized commercial supplementary medical insurance Huhuibao, effectively reducing the burden of medical expenses on Shanghai citizens. It steadily and orderly promoted implementation of comprehensive auto insurance reform in Shanghai, and nearly 90% of consumers enjoyed the preferential premium after the reform.

Fifth, it effectively prevented and controlled major financial risks. It adhered to the bottom line that no systemic and regional risk should occur. In the past decade, the city has successfully resolved a total of more than 260 billion yuan in non-performing loans, the non-performing loan ratio in the city’s banking industry at the end of August was 0.85%, and the asset quality is among the best in the country. It orderly promoted the risk mitigation and disposal of some high-risk institutions, steadily carried out special rectification projects on online lending risks, accurately cracked down on violations of laws and regulations such as businesses that induced consumers to entrust them as agencies to cancel insurance, thus building a solid cornerstone for risk prevention. It adhered to delivering the supervision function. A total of 557 banking and insurance institutions and 280 responsible personnel have been punished in the past decade, with the total amount of fines and forfeitures exceeding 420 million yuan.

(IV)

Since the 18th National Congress of the Communist Party of China, the Shanghai Securities Regulatory Bureau has conscientiously performed the first-line supervision duties as a dispatched agency under the unified leadership of the China Securities Regulatory Commission and support by the CPC Shanghai Municipal Committee and the Shanghai Municipal Government. It made positive progress in promoting the reform of the capital market in Shanghai, and the overall development of the Shanghai capital market has reached a new level.

At present, the market size of the Shanghai Stock Exchange has reached 49 trillion yuan, an increase of nearly 2 times in the past decade, enabling the city to jump from seventh place in the world to third place. The city’s bond market has raised nearly 34 trillion yuan, making it the world’s largest exchange-based bond market. Since the beginning of this year, the cumulative turnover of the Shanghai Futures Exchange has been 107 trillion yuan, which is 3.2 times that of the same period in 2012. In the past decade, 26 futures and option products were launched in Shanghai’s capital market, which was more than twice the number of previous varieties, basically covering the main areas of the national economy such as agricultural products, chemicals, metals, and energy sectors. The China Financial Futures Exchange has also built two major product lines on equities and interest rates, making important contributions to promoting the construction of Shanghai International Financial Center.

In the past decade, the breadth and depth of capital market services to the real economy have been expanded significantly. The capital market has provided direct financing of more than 4 trillion yuan for Shanghai-based enterprises, supported 207 local economic pillar enterprises and strategic emerging industry enterprises to grow bigger and stronger through public listings, and enabled 120 listed companies to achieve asset restructuring and accelerate transformation and upgrading through mergers and acquisitions. The total market value and IPO size of Shanghai-based listed companies on the Science and Technology Innovation Board rank first in all provinces and cities in the country, and the agglomeration effect of the “hard technology” industry has been prominent. In addition, the investment by private equity and venture capital funds in Shanghai-based high-tech enterprises has exceeded 850 billion yuan, which effectively promoted the formation of innovative capital. The number of customers served by Shanghai-based securities operators exceeded 33 million.

In the past decade, the quality of listed companies in Shanghai has been steadily improved. From the perspective of operating efficiency, the total market value and total assets increased by 2 times and 2.3 times respectively, and the total market value ranked third in the country. The average annual compound growth rate of operating income and net profit reached 10%. The cumulative cash dividend in the past three years reached 353.1 billion yuan, an increase of nearly 19% over the previous three years, far exceeding the increase in net profit. From the perspective of industry distribution, strategic emerging industry enterprises accounted for nearly 40%, and listed companies in strategic emerging industries have become an important force in promoting economic transformation.

In the past decade, the comprehensive strength of Shanghai-based securities, funds and futures institutions has been continuously enhanced. The number of institutions continued to lead the country, and the agglomeration trend continued to expand. The total assets of securities companies and futures companies increased by 5.1 times and 9.2 times respectively, and the assets under management by public funds increased by 9 times. Product innovation was active in Shanghai as the city led nationwide in various innovative businesses, and innovation ability for comprehensive services has been steadily improved.

In the past decade, Shanghai’s capital market and industries have made positive progress in the two-way opening-up. As the preferred choice among foreign-funded institutions, Shanghai has been leveraging this remarkable effect. A number of first or demonstration projects such as the country’s first wholly foreign-owned public fund company and the first wholly foreign-owned securities company have settled in Shanghai. Shanghai-Hong Kong Stock Connect, Shanghai-London Stock Connect, China-Japan ETF Connect and Shanghai-Hong Kong ETF Connect have been successively launched. The Shanghai Futures Exchange has successively launched five international futures and options varieties such as crude oil, No. 20 rubber, low-sulfur fuel oil, international copper futures and crude oil options, attracting overseas traders from more than 20 countries and regions. The influence of “Shanghai Price” continued to expand. Prices on “Shanghai Crude Oil”, “Shanghai Copper” and “Shanghai Rubber” are widely used in spot and cross-border trade pricing, becoming indispensable price references for the international commodity markets.

In the past decade, the environment for the rule of law and integrity in the Shanghai’s capital market has been continuously optimized. In terms of systems and policies, institutional policies such as promoting the improvement of the quality of listed companies in Shanghai, promoting the construction of Shanghai Global Asset Management Center, and strictly cracking down on securities-related illegal activities in accordance with the law, have been implemented. In terms of working mechanisms, extensive cooperation with financial regulatory departments, judicial organs and relevant units and departments has been continuously strengthened through the signing of memorandums of understanding, collaborative opinions, coordinated investigations, etc. And a wide range of joint forces have gradually been formed to crack down on violations of laws and regulations in the fields of securities and futures. In terms of education for investors, since the establishment of the Shanghai Investor Protection Alliance in 2020, the city has gradually formed six functional platforms on investor education work display, investor education product sharing, investor education lecturer pool, major activities joint-holding, investor education site exchange, and financial dispute resolution. At present, there are 23 licensed investor education bases in Shanghai, ranking first in the country.