Main tasks and measures for the development of Lujiazui Financial and Trade Zone
1. To accelerate development environment
(1) To optimize industrial layout for financial industry Establish an 11.9-square kilometer “financial town” that would deepen linkage development between front and support services for the financial sector. As for front services, to attract more high-level financial organization headquarters domestic and abroad to settle and develop main financial businesses such as banking, stock, insurance and assets management. Key construction projects of some financial centers will speed up. As for support services, efforts can build financial data processing centers and research on back-up land planning by the end of the 12th Five-Year Plan (2011-15).
(2) To upgrade infrastructure facilities Commercial facilities need improvements, especially facilities in commercial buildings. Build bus route grids, increase more taxi stands near all complexes and accelerate key projects of road construction. A wireless service platform could cover the whole zone with wifi service. To boost recognition of the zone, the magazine Lujiazui Financial and Trade Zone was founded. Theaters and museums would open to the public to enrich the cultural atmosphere.
2. To build multi-level financial market
To make existing financial markets robust. Expand trade of listed products at the Shanghai Stock Exchange and enlarge the scale of fixed-income products. To encourage the Shanghai Futures Exchange to develop more futures options products and commodity index futures options; to support the China Financial Futures Exchange to launch new financial derivative products. To introduce new types of bonds, such as foreign currency and project revenues bonds, should be introduced by the inter-bank market. To accelerate a new financial markets culture. Advancing construction of the Yangtze River Delta-based OTC (over-the-counter) market to dock with the national OTC market system. A national bill trade center would upgrade the loan transfer platform, expand cross-regional credit transfers, develop bill markets and explore effective forms of bill markets organizations.
3. To boost financial service organizations
(1) Supervisory financial organizations would be advised to come to Pudong. Give priority to national functional financial organizations; pay attention to the deposit insurance system; encourage national deposit insurance companies to settle in the zone. Encourage state-owned commercial banks and other large financial organizations at home and abroad to build their headquarters in Pudong. Introduce financial backend service providers; support development of outsourcing non-core services and reform backend services organizations.
(2) To develop new-type non-regulatory financial organizations. Develop equity investments and equity investment management enterprises; deepen pilot projects on foreign-invested equity investment enterprises; foster globally renowned equity investment institutions in Pudong; urge foreign equity-invested enterprises to establish RMB funds; encourage development of local equity-invested enterprises; upgrade mechanisms of archival filing management and risk prevention. Expand single-ship and single-aircraft SPV financing pilots; attract key enterprises in financing and leasing sectors. Regulate various types of collective investment institutions and private securities investment funds through trust schemes and limited partnerships. Develop hedge funds and promote financial technologies that prevail overseas.
(3) To cultivate future financial organization. Deepen the petty loan company pilot project. Urge companies to serve small and medium-sized enterprises and develop rural areas by drafting supervisory regulations on petty loan companies and controlling operation risks. Screen financing guarantee institutions to boostmanagement of such institutions to secure standardized development. According to deployment of government, non-commercial guarantee resources should be integrated in the district.
(4) To develop professional back up services institutions. Build service system for the financial industry and introduce Bloomberg, Thomson Reuters, ‘Big Four’ accounting firms and accelerate local service institutions, including Wind Info and Xinhua 08. Guide third-party payment companies, support qualified enterprise to apply for payment licenses. Conduct research on support policies for third-party payment companies. Develop local credit rating agencies and foster associations for financial industry by introducing the Shanghai Securities Association and Insurance Association. Support the Shanghai Banking Association, Shanghai Futures Association, Shanghai Fund Association, and urge emerging industries on equity investments, leasing, and trusts.
4. To open the financial industry
(1) Promote financial markets. Encourage investors overseas to participate in domestic investments and support securities markets to expand investment quotas of QFII. Encourage the futures market, financial derivatives market and inter-bank market to explore adoption of QFII system. Welcome direct financing of outstanding enterprises abroad. Support the Shanghai Stock Exchange to launch an international board as soon as possible, develop cross-border ETF products based on the Hong Kong stock market. Support inter-bank market to introduce foreign institutions to issue bonds and encourage financial institutions to develop RMB investment products that meet the needs of foreign entities. Make Pudong the first pilot of the foreign exchange management system reforms by the State Administration of Foreign Exchange.
(2) Open up the financial services sector. Promoting banking, insurance, securities and futures industries. Relax restrictions on industry access, as well as business and geographical restrictions on foreign financial institutions. Support institutions in Pudong to cooperate with multinational institutions and improve local institutions’ global vision, capital strength and services by establishing joint financial institutions or transferring part of shares. Open up industries, such as credit services, assets valuation, management consulting, financial information, accounting and auditing, legal services on finance. Boost back-up services for global financial resources of the Shanghai financial market.
(3) Internationalize RMB currency Improve infrastructure for cross-border settlements for RMB; encourage national commercial banks to establish settlement centers in Pudong; help incorporated foreign banks in Pudong to get qualifications as settlement agent banks in inter-bank market, and accelerate China UnionPay’s global business network. Deepen the RMB cross-border trade settlement pilot and encourage overseas branches of local Chinese banks to pioneer it, and urge local enterprises and residents to invest abroad with RMB. Foreign enterprises that use RMB to invest in domestic market are welcome. Promote local financial organization’s services on RMB internationalization, encourage financial organizations in Putong to develop overseas business networks to provide services for overseas financing of large domestic enterprises, and enterprises that participate in RMB cross-border trade settlements.
5. To enhance government’s level of services
(1) Set up public platform of concentrated development for financial organizations. Local government should offer full range of services for financial organizations, such as registrations of businesses or taxes, site selections, building construction, office decorations, and household registration migration.
(2) Provide a stage for financial talents. Lujiazui will import international frontrunners on financial strategy to launch a high-level overseas financial talent base in the Lujiazui Financial and Trade Zone. Carry out more incentive policies to recruit local talents, including housing, household registration, health care and education, as well as simplifying exit and entry approval procedures.
(3) Offer public platform for development of economy and society. Establish financing platform, upgrade mechanisms of leadership and promotions, organize consultant groups and provide convenient passage for the listing of enterprises. Set up financing platform for small and medium-size enterprises (SMEs) and introduce government’s discount management approach and formulate preferential policies on credit funds for science and technology intensive SMEs. Improve security mechanism, integrate guaranty resources and organize guarantee groups in the New District. Expand pilots of debt financing products of SMEs. Promote small loan company pilots. Encourage financial organizations to develop new products, expand business and support affordable housing, old-age security system and new rural cooperative medical service system.
6. To boost integrated development of finance industries
(1) To promote shipping trade with financial support Expand pilot projects of futures bonded delivery business, international trade settlement centers and multinational cross-border foreign exchange centralized management to develop shipping industry, port trade and shipping-related insurance business. Foster financial organizations, shipping enterprises to build headquarters or offices in Shanghai. Encourage financial organizations, social capitals and foreign capitals to establish shipping industry funds or ship aircraft investment funds. Improve the financial organizations’ services for shipping centers and change finance lease business taxes into VAT and expand finance leases of aircraft and ships, accelerate the shipping-related insurance business.
(2) To innovate economic development model with financial support Speed up the financial services system for small and medium-sized technology-based enterprises (SMEs) and innovate the financing model. Deepen cooperation among government, banks and enterprises, so risk sharing and incentive mechanism can provide better financing conditions for investments. Non-commercial financing guarantee group should regulate the financing guarantee industry. Develop financial products that confirm with characteristics of SMEs, as well as explore various methods of financing.
(3) To improve people’s livelihood and develop the rural economy with financial support. Consumer finance business should be expanded to the automobile, electric household appliances, decoration, and education sectors. More facilities for communities should be built. Help financial organizations to establish agencies in less-developed areas to serve the rural population with credit, insurance, and financing banking. Encourage insurance capital to invest in people’s well being, such as social medical services and old-age service organizations.
7. To encourage trans-regional financial cooperation
(1) To enhance financial cooperation with Yangtze River Delta and other regions. According to national strategic deployment, Pudong will explore more cooperation and upgrade the communication mechanism with other cities within the Delta.
(2) To communicate with developed financial centers Strengthen financial cooperation with Hong Kong and Taiwan; attract more enterprises, organizations and investors to the Pudong financial market; develop more partner-based financial products and services, as well as encourage better communications.