Shang­hai eyes key role in Belt, Road

China Daily (USA) - - FRONT PAGE - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Shang­hai aims to be­come an in­vest­ment and fi­nanc­ing hub for mar­kets in­volved in the Belt and Road Ini­tia­tive and a global ren­minbi fi­nan­cial ser­vices cen­ter, said city au­thor­i­ties on Wed­nes­day.

“The city will step up the open­ing of the fi­nan­cial mar­ket, lever­ag­ing re­sources and in­no­va­tive mech­a­nisms at the China (Shang­hai) Pi­loted Free Trade Zone, such as cross-bor­der fi­nanc­ing and in­vest­ment, and the is­suance of ren­min­bide­nom­i­nated bonds,” said Tang Zhip­ing, di­rec­tor of the Shang­hai Mu­nic­i­pal De­vel­op­ment and Re­form Com­mis­sion.

Shang­hai mu­nic­i­pal gov­ern­ment re­leased a cir­cu­lar on Wed­nes­day that in­cludes 60 mea­sures to max­i­mize the im­pact of ex­ist­ing poli­cies to bet­ter serve de­mands from coun­tries and re­gions in­volved in the Belt and Road Ini­tia­tive in as­pects in­clud­ing trade and fi­nanc­ing, cul­tural ex­changes, ed­u­ca­tion and hu­man re­sources, in­no­va­tion and tech­no­log­i­cal de­vel­op­ment, and pol­i­cy­mak­ing.

Shang­hai will sup­port over­seas in­sti­tu­tions and en­ter­prises to is­sue ren­min­bide­nom­i­nated bonds in Shang­hai’s fi­nan­cial mar­ket, ac­cord­ing to the cir­cu­lar.

In March 2013, Rus­sia’s com­pany UC RUSAL, world’s sec­ond largest alu­minum sup­plier, be­came the first com­pany from a mar­ket in­volved in Belt and Road Ini­tia­tive that has is­sued ren­minbi-de­nom­i­nated bond at Shang­hai Stock Ex­change.

Since then, the com­bined size of ren­minbi-de­nom­i­nated bonds is­sued in Shang­hai have sur­passed 200 bil­lion yuan ($30.32 bil­lion). Is­suers in­clude global fi­nan­cial in­sti­tu­tions, cen­tral and lo­cal gov­ern­ments of other coun­tries, and over­seas non-fi­nan­cial en­ter­prises.

By the end of Au­gust, the Shang­hai Gold Ex­change had 12 in­ter­na­tional mem­bers in mar­kets in­volved in the Belt and Road Ini­tia­tive, ac­count­ing for 20 per­cent of its in­ter­na­tional mem­bers.

“Shang­hai will also take ad­van­tage of cross-bor­der ren­minbi busi­ness fa­cil­i­ties to bet­ter serve trade and fi­nanc­ing for mar­kets in­volved in the Belt and Road Ini­tia­tive”, the cir­cu­lar said.

The Cross-Bor­der In­ter-Bank Pay­ment Sys­tem in Shang­hai will en­able cross-bor­der settlement and clear­ing in ren­minbi that fa­cil­i­tate trade and fi­nanc­ing for over­seas com­pa­nies op­er­at­ing in China.

Cur­rently, 19 banks have been us­ing the CIPS sys­tem to help clients in these busi­nesses. More than 670 com­pa­nies have used two-way cross-bor­der ren­minbi cash pool­ing ser­vices in in­ter­na­tional trade and fi­nanc­ing with a com­bined trans­ac­tion vol­ume of some 865 bil­lion yuan.

“The Belt and Road Ini­tia­tive is an open plat­form that cre­ates op­por­tu­ni­ties to mar­kets which are in­volved, and the in­flu­ence and ben­e­fits have al­ready been ex­pand­ing from ini­tially in­fra­struc­ture to other sec­tors”, ac­cord­ing to a re­cent re­port on Belt and Road Ini­tia­tive by con­sul­tancy ser­vices provider PwC.

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