International Financial Center Initiative

(sh-italent.com)Updated : 2017-02-03

Financial institutions are diversified with stronger development momentum

Financial institutions in Shanghai are very diversified and they include commercial banks, security companies, insurance companies, fund management companies, futures companies, non-bank financial institutions, functional financial institutions (such as capital operation center and credit card centers) and new types of financial institutions (for example small loan companies). Meanwhile, there have been a quite number of financial service providers such as financial information service companies, equity investment companies, and investment and asset management companies.

In 2014, financial system in Shanghai continued to improve. Jointly funded by China, Brazil, Russia, India and South Africa, BRICS Development Bank has located its headquarter in Shanghai. One of the first group of private banks, Shanghai Huarui Bank, was approved. Internet financial service platform, E-Capital Transfer Co, has been established in Shanghai, serving the security community. Leading e-commerce companies such as Baidu and JD have established Internet-based small loan companies.

In 2014, 13 branches of foreign banks and four branches foreign insurance or re-insurance companies such as Zurich General Insurance were registered in the FTZ. Starr Insurance has incorporated foreign property insurance company. Famous international fund service companies such as State Street and Northern Trust have entered Shanghai via QDLP.

Up to the end of 2014, there have been 1,405 financial institutions in Shanghai including 419 foreign financial institutions, accounting for 1/3. The city ranks the top in China in terms of the number of different financial institutions. Twenty-two foreign legal-entity banks are headquartered in Shanghai, accounting for more than half of China. The number of JV security companies, JV fund management companies, and foreign property insurance companies takes up approximately half of their total numbers in China.

Thanks to the favorable business environment in Shanghai and China’s steady economic growth, the dynamics of financial institutions in Shanghai has been strengthened. According to the announcement of Shanghai Statistics Bureau, the added value of financial industry in Shanghai totaled 212.1 billion yuan in 2014, 8.5 percent higher than the previous year and accounting for 12.8 percent of the city’s GDP. Forty-two financial companies have been in the list of “top 100 tax contributors” published by Shanghai Tax Administration in 2014.

New steps have been taken in the opening of financial sector in Shanghai

Shanghai Financial Service Office has strengthened contacts with state financial regulators and is implementing Shanghai’s International Financial Center Initiative leveraging the opportunity of the FTZ.

Since the establishment of the FTZ, PBOC, CBRC and CIRC have announced 51 opinions and measures and 13 implementations rules to support financial reform in the FTZ based on discrete principle and controllable risks. These policies have shaped the financial reform framework for capital account convertibility and financial service opening. On June 18, 2014, Shanghai FTZ launched FT account. Now the FT account can be used to conduct RMB current account and cross-border capital settlement for direct investment, and have provided vehicles and tools for foreign exchange innovation.

Ten innovative financial services have been awarded by Shanghai Municipal Government as “2014 Financial Innovations in Shanghai”. For example, the “international board” of Shanghai Gold Exchange, and “worldwide priority service for the FTZ” provided by Shanghai Branch of Bank of China. These innovative services significantly help open the financial sector, support cross-border use of RMB, promote double-way RMB cash pooling.

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