B2 Wednesday August 21, 2019
BIZUPDATE
Goal is for breakthroughs in trade, investment and finance
Shanghai FTZ expanding in size, ambitions
HSBC, which has the largest assets
among foreign banks in the Chi-
nese mainland, was not selected by
the People’s Bank of China (PBC),
China’s central bank, as one of the 18
rate-setting banks including two over-
seas banks in its recent interest rate
mechanism reform.
The PBC chose Standard Char-
tered and Citigroup.
This led to market speculation as
to whether HSBC failed the selection
partly because of the controversy sur-
rounding its alleged involvement in
the US’ investigation into Chinese
telecommunications giant Huawei.
HSBC didn’t respond to an inter-
view request from the Global Times
as of press time.
At a press conference on Tuesday,
a reporter raised the question of why
HSBC was not included in the list of
quoting banks for the loan prime rate
(LPR).
Sun Guofeng, head of the mon-
etary policy department of the PBC,
said at the news conference that the
newly added banks “have a relatively
big influence in the credit market
among similar banks, relatively
strong loan pricing capabilities and
relatively good effects in serving
small and micro-sized enterprises.”
“All the eight new quoting banks
have those characteristics and they
were selected by the market rates
pricing self-discipline mechanism,”
Sun said.
The eight new banks, including
two overseas banks and some domes-
tic commercial banks, joined the club
of rate-setting banks, composed of 10
major banks in the past, that report
their one-year and five-year LPR to
the PBC on a monthly basis.
The PBC will announce a LPR
based on the average of those rates
for the banking industry to use as a
benchmark.
Xi Junyang, a professor at the
Shanghai University of Finance and
Economics, told the Global Times
that it’s hard to say why HSBC was
not chosen as one of the new quoting
banks “but the stumbling reputation
of HSBC in China is likely to be one
of the reasons.”
Sun said that the quoting banks
will be “adjusted” in the future ac-
cording to regular appraisals of their
quotations.
Global Times
Companies listed in the A-share stock market
have new opportunities in sectors including ad-
vanced technology, manufacturing and biotech-
nology in Shenzhen, South China’s Guangdong
Province, with the release on Sunday of a national
master plan to build the city into a model area.
Shenzhen-based companies that are poised to
benefit from the plan already operate in a wide
range of businesses including finance, fintech,
telecommunications, new energy, biomedical sci-
ence and real estate.
Shenzhen will again become a pilot demon-
stration area, companies have said. The city was
the first special economic zone established in
China and a model for reform and opening-up.
Companies based in the city drew a new wave
of investment and their shares soared after the
plan was announced. The shares of more than
30 Shenzhen-based companies rose by the daily
10 percent limit on Tuesday after an average in-
crease of 5.6 percent on Monday.
There will be development dividends for Shen-
zhen and the Greater Bay Area in the future, said
BGI Group, which is a life science and genomics
company based in Shenzhen, stcn.com said.
“The Shenzhen pilot demonstration zone will
become a major innovation center for life infor-
mation and biomedicine laboratories, enabling it
to explore the construction of an international sci-
ence and technology information center and an
academy of medical sciences,” said BGI Group.
The master plan to build Shenzhen into a pilot
city with global competitiveness calls for the high-
quality development and cooperation of Shen-
zhen with the Greater Bay Area, said Bai Ming, a
research fellow at the Chinese Academy of Inter-
national Trade and Economic Cooperation.
Among companies that stand to benefit, Shen-
zhen SinoSun Technology Corp said that it will
achieve business transformation and upgrading
by seizing the historical opportunities of the de-
velopment of the area and fintech, according to
sina.com.cn.
Global Times
By Chu Daye
The China (Shanghai) Pilot
Free Trade Zone (FTZ) on Tues-
day added a new area that oc-
cupies 119.5 square kilometers
of Lingang in the southeastern
part of the city. Chinese ana-
lysts said the addition, which
nearly doubled the size of the
Shanghai FTZ, will bring vigor
and confidence to the region.
The Lingang Special Area
occupies a pivotal geographic
position, which enjoys the ad-
vantage of being easily accessed
by air, sea and rail through its
proximity to Shanghai Pudong
International Airport, the Yang-
shan Port and a planned high-
speed railway. Yangshan Port is
the world’s top container port.
The area’s inauguration was
on Tuesday, but the approval by
the State Council, China’s cabi-
net, was made public earlier in
August. According to the State
Council, Lingang is expected to
become a globally competitive,
influential free trade area with
special functions by 2035.
Liu Shengjun, director with
the National Affairs Financial
Reform Institute and FTZ ex-
pert, said that the term “special
functions” hinted that the area
will develop offshore trade.
In the case of Shanghai,
offshore trade is handled by
companies in the city, although
the goods concerned originated
outside China and are being
dispatched to overseas buyers
via direct shipment or trans-
shipment without entering
China.
“This would bring break-
throughs in trade, investment
and finance,” Liu said. “This
would bring new economic out-
put for China.”
The expansion of the Shang-
hai FTZ came just two days
after the central government
announced plans to develop
Shenzhen, South China’s
Guangdong Province into
a pilot demonstration area
with Chinese characteristics.
Analysts said that the two an-
nouncements will boost busi-
ness confidence in China, al-
though executives are waiting
for more concrete measures
due to be released in the com-
ing weeks.
The area is 75 kilometers
from downtown Shanghai.
The Shanghai Municipal-
ity hopes to attract advanced
industry, including integrated
circuits, biopharmaceuticals,
artificial intelligence (AI), aero-
nautics and aerospace, to form
industrial clusters in the area.
Nearby transportation hubs are
expected to support the trade
and industrial development of
the new area.
Analysts said the focus will
be on China’s manufactur-
ing weak links in its industrial
chain in the fields of chips,
drugs, smart technology, air-
craft engines, new-energy ve-
hicles and data centers. Chips
and AI are of special impor-
tance, they said.
Analysts said that the de-
velopment of the Lingang area
could include an experiment
in cross-border capital man-
agement to better compete for
global trade resources and the
development of a free trade
port, although the plan used
the terminology, “internation-
ally acclaimed, most competi-
tive free trade industrial park.”
Robots are on display at the World Robot Conference 2019, which opened in Beijing on Tuesday. More than 180
robotics makers from around the globe brought more than 700 products for the industry, logistics and services
sectors to the conference to showcase their latest technology and applications. Photo: IC
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POLICY
DEVELOPMENT
FINANCE
HSBC left off list of rate-setting banks in rate reform
Domestic-listed firms
see future in Shenzhen
Mechanical marvels