A glance at the financial scorecard of Shenzhen’s publicly listed companies in the most recent quarter shows an impressive performance: Across 393 companies, listed on six stock exchanges at home and abroad, revenues rose by 13.05%, profits by a whopping 33.08%, YoY.
Fintech Week is proving to be a global PR bonanza for Hong Kong. Local media have been buzzing for the past two days about Alipay’s decision to open its payment platform inside the Chinese mainland to foreigners, the announcement of which was clearly timed to coincide with the Hong Kong event. And Mu Changchun, the central bank’s whizzkid overseeing the imminent launch of the digital Renminbi, kept the momentum going yesterday by suggesting foreigners could use it, too.
As reported by SCMP, Mu said the central bank is working to
separate the virtual currency from the banking system. “Actually it could be
decoupled from traditional bank accounts,” he said during an event at Fintech
Week, which is being held at the AsiaWorld-Expo. “Thus, those who don’t have
bank accounts in China can still open a digital wallet and enjoy mobile payment
services in China.”
The provincial capital is not often thought of as a financial center. It doesn’t have a stock exchange of its own, and financial services comprise less than one-tenth of GDP. This contrasts with Hong Kong and Shenzhen, where financial services contribute roughly twice as much (19%-20%) to GDP. Guangzhou, instead, has traditionally been known as an industrial powerhouse, dominated by state-owned enterprises in heavy industries and SMEs in export-oriented manufacturing.
Yet Guangzhou’s ambitions for developing financial services should not be underestimated. This is especially as the Nansha special economic zone is built out in the coming years (see our primer on Nansha, and its World Financial Island in Hengli). That is where a GBA International Bank is being built, and where a new Futures Exchange will be launched, initially trading carbon credits.
Indeed, Guangzhou is showing that a city doesn’t need to have a stock exchange to make its financial sector go. And with the rise of fintech, it remains to be seen how the entire industry will be shaken up to the point where traditional financial institutions and trading platforms will matter less than they do now.
Yesterday the Shenzhen Evening News had a long article extolling the virtues of the Futian district as the city’s financial heart. The main thrust of the piece is preceded by accounts of what the political leadership has been up to recently, including that Party Secretary Wang Weizhong met on August 29 with Yi Gang, head of the central bank, in Shenzhen. They discussed what any two cadres with their fingers on the pulse of international finance would: Internationalization of the renminbi, digital currency research, green finance, etc. They decided to, first and foremost, continue to deepen financial reform and opening up, realize the high-quality development of Shenzhen’s financial industry, and fully promote the implementation of the major decision-making arrangements of the Party Central Committee.
Shenzhen’s dominant financial services group, Ping An Insurance, beat expectations for the first half of the year, announcing yesterday its biggest jump in interim net profits in five years. The company’s stock rose in Hong Kong trading today, unsurprisingly. Continue reading Ping An beats expectations→
The Guangdong Financial High-tech Zone, located in Foshan’s Nanhai district, close to the border of Guangzhou, has attracted more than 670 financial institutions and enterprises in the past 12 years.
Yes, we have never heard of it, either.
The provincial government backed high-tech zone, which is positioned as a support base for the development of the province’s finance industry, has seen its companies execute investments worth RMB112 billion, with RMB820 billion of assets under management.
The zone is home to over 30,000 staff, primarily working as back-office support to finance companies. They work mostly in clusters. In the Qiandenghu (Thousand Lamp Lake) town, for example, there are 489 private equity funds with names such as IDG Capital, Technology Financial Group, Beijing Heju Investment, and China Trust Protection Fund. These have raised a total of RMB61 billion.
Last year, the Financial High-tech Zone set an audacious new goal for itself: to create a “blockchain” powered fintech innovation base, and to construct a complete value chain that complements the Qiandenghu Venture Capital Town.
Now that we know about it, watch this space for more detailed introduction to the zone.
The annual China (Guangzhou) International Financial Exchanges Expo was held over the weekend, with more than 100,000 visitors attending. No fewer than 48 projects were sealed at the fair, with contracts signed worth nearly RMB 350 billion. These included seven major projects related to infrastructure buildout in the Greater Bay Area.
While the headline figure may sound large, these projects are all related to plans that have been in the pipeline for some time. They are part of the province’s ongoing public spending program. Still, the fair was noteworthy for the fact that fintech projects were exhibiting for the first time.
Hong Kong’s monetary authority has issued four virtual banking licenses to applicants affiliated with a trio of China’s largest technology companies as well as the city’s stock exchange, in a move to speed up disruption and innovation in one of the world’s best served financial centers, reports the SCMP.
The four new licenses have gone to Ping An Insurance’s subsidiary Ping An OneConnect, Ant Financial Services’ unit Ant SME Services, a Xiaomi-AMTD Group venture called Insight Fintech HK, and the Infinium consortium that includes Tencent Holdings, the Industrial and Commercial Bank of China (ICBC), and Hong Kong Exchanges and Clearing (HKEX).
The latest permits add to the four that the monetary authority (HKMA) has already issued since March to spur competition and innovation.
State-owned China Construction Bank (CCB) and tech giant Tencent have teamed up to build a lab focused on fintech innovation, it was announced in Shenzhen this week. The lab will be led by Tencent’s cloud business unit, reports Caixin Global.
Tencent’s rival Ant Financial has also inked multiple deals with Chinese state banks, including CCB in May 2017, according to CGTN.
As one of the first three joint ventures granted a virtual banking license in Hong Kong, Standard Chartered has embarked on a PR effort to raise awareness of what it is doing. The bank’s Hong Kong CEO, Mary Huen Wai-yi, told the 21st Century Business Herald that the virtual bank will focus initially on providing basic deposit and lending services, which would not have minimum-balance requirements, while the process of opening an account would be easier than at a traditional bank.
Standard Chartered won the license in a venture together with Hong Kong Telecom, PCCW and China’s largest online travel agency, Ctrip. Huen did not reveal the product brand that will be offered by SC Digital Solutions, but said that it has already recruited around 100 staff from home and abroad.
Huen said the bank will ramp up its pre-opening operations over the next six to nine months. It is building capabilities in risk management, anti-money laundering, identity verification and online account set-up. The goal is to bring banking services into people’s day to day lifestyles – which are increasingly online. For example, if a user needs to book an overseas hotel through Ctrip, they should be able to do currency exchange and buy travel insurance seamlessly with the new bank.