Beijing’s innovation, opening-up efforts in financial sector more attractive for foreign players: expert
Published: Nov 09, 2023 10:21 PM
A snapshot of the Beijing Financial Street Photo: VCG

A snapshot of the Beijing Financial Street Photo: VCG

With more than two hundred driverless logistical vehicles running in designated parks in Beijing, Yu Enyuan, CEO of Neolix, a start-up specializing in making these vehicles, expressed gratitude for the burgeoning business when looking at a huge screen which vividly displayed the busy scene in Neolix's exhibition room in southeastern Beijing's Yizhuang area.

"The company needed a lot of capital during its initial development phase, when a bank's loan is of great significance to the business' survival," Yu said.

The mobility start-up received a loan worth 1.5 million yuan ($206,000) in the first time when it contacted Bank of Beijing. As its business expands, the bank further increased credit support, increasing the amount four times to a total of 10 million yuan.

Neolix's case is an example of Beijing's broad push in accelerating reforms in the financial sector, and better serving the real economy.

Since its official launch in 1993, Beijing's Financial Street - where major banking, insurance, securities and currency services institutions are located - has achieved noteworthy outcomes in contributing to the city's role as a national financial management center.

Until today, there is still a well-known saying which goes around Financial Street: it could contribute nearly 40 percent of added value of the financial industry in Beijing with only 0.02 percent of its physical area. So far, there are more than 1,900 financial institutions, and 175 companies which have established their headquarters in the area.

The capital city has focused efforts on advancing China's opening-up and development better ranging from the landmark move in setting up Beijing Stock Exchange (BSE) in September 2021 to expanding scale of REITs (real estate investment trusts) pilot programs for infrastructure.

The establishment of the BSE has further refined the capital market ecosystem of Beijing, and improved its capacity to better serve the building of an international center for sci-tech innovation. To date, a total of 225 companies had listed on the exchange, with most involved in strategic emerging industries and advanced manufacturing sectors.

In the first three quarters of this year, the BSE listed companies achieved operating revenues worth 120.35 billion yuan, and net profit reaching 8.86 billion yuan. Among them, 60 percent of companies recorded positive growth in revenue on a year-on-year basis, while 50 percent of them reported positive growth in net profits, domestic media outlet reported.

Since the 20th National Congress of the Communist Party of China, Beijing has focused on leveraging the role of three major platforms - the China International Fair for Trade in Services, the Zhongguancun Forum and the Financial Street Forum, bringing its financial assets exceeding 200 trillion yuan, accounting for about half of the country's total, the Xinhua Daily Telegraph reported. 

In the first half of 2023, the capital's financial industry achieved added value of 411.99 billion yuan, an increase of 6.5 percent on a yearly basis, data from the People's Government of Beijing Municipality showed.

In terms of serving the real economy, Beijing has made full use of monetary policy tools, and loan interest rates have continued to remain at historically low levels. In the first half of the year, various enterprises directly raised a total of 524.46 billion yuan, the highest level in the country.

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Beijing has an important position and a special mission. It has unique advantages in headquarters resources, high-end talent, and financial infrastructure. The financial industry has become the capital's largest pillar industry, and its technology, green and digital finance are all playing at the forefront of the country, Li Yunze, head of the National Financial Regulatory Administration, said during a keynote speech at the opening ceremony of the ongoing Financial Street Forum annual conference that kicked off in Beijing on Wednesday.

"Moving forward, we will continue to fully support Beijing's pilot financial reform and development and build an internationally competitive modern financial system," Li noted. 

Along with the continuous opening-up of the country's financial sector, the internationalization of Beijing's local capital market has been significantly improved.

Goldman Sachs, UBS, Credit Suisse, Morgan Stanley and other international investment banks have increased their investment and business footprint in Beijing by adding their stakes in local joint ventures, and foreign institutions including Daiwa Securities Group and Oaktree Capital Management set up new businesses in the city. 

The latest progress came as China's financial regulator greenlighted the establishment of two overseas insurance brokerages in the country, namely BMW (China) Insurance Brokers Co Ltd and ERGO-FESCO Broker Company Limited, the first of such approvals in five years, marking the nation's gaining pace in opening up in the financial sector, according to the annual conference of Financial Street Forum 2023. 

As a national financial management center, the capital city's financial development will focus more on policy guidance and research, complementing the role of Shanghai and the Hong Kong Special Administrative Region, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Thursday.

"The unique advantages of Beijing in financial policy and information guidance have become more important for foreign players amid a volatile world economy struggling to recover," Dong said.

Bruce Pang, head of research and chief economist at JLL for Greater China, told the Global Times on Thursday that the reason behind foreign financial institutions' accelerating deployment in the Chinese market is that the Chinese market and Chinese financial assets can provide global investors with channels to share the dividends of China's economic growth and sustainable, safe and long-term investment opportunities.

"For foreign-funded institutions, Chinese financial assets represented by yuan-denominated assets have diversified investment value, actual capital allocation needs, and they are supported by the economic fundamentals," Pang said, adding that the in-depth participation of foreign financial institutions in China's financial market is the best vote of confidence for the country's economic growth and social development.