Global Times - 21.08.2019

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