Themed “Finance Empowers Sustainable Innovation, Investment Advances Inclusive Growth”, a CIFTIS achievement release event was conducted on September 5 at the China National Convention Centre.
It is co-organized by organizations including Federation of International Financial Centres and International Innovation Centres, National Academy of Development and Strategy at Renmin University of China, The PBC School of Finance at Tsinghua University, China Overseas Development Association, China Association for the Promotion of Development Finance and China Innovation Finance Institute (Chengdu). Beijing Chaoyang District Government provided support as co-organizer.
Diversified and high-level achievements have been realised on the event, which includes the signing of MOUs, report launch, and initiation of new multi-lateral cooperation platforms.
International Innovation Investment: Start here in China
H.E. Dr. Mohamed Ghassan Mohamed Adnan Shaikho (Ambassador of the Kingdom of Bahrain to the People’s Republic of China), Mr. HE Zhenwei (Chairman of the China Overseas Development Association), Ms. GUO Mingshe (Vice President and Secretary-General at the China Association for the Promotion of Development Financing), H.E. Mr. László Havas (Minister of Financial Affairs, Embassy of Hungary to China), Mr. Kuanysh AMANTAY (General Representative in China and East Asia, Kazakh Invest National Company) and Mr. Calvin Fu (Chairman of China Innovation Finance Institute) made key-note speeches, witnessed and expressed their congratulations on the success of forums, exhibition and the achievement release event.
H.E. Dr. Mohamed Ghassan Mohamed Adnan Shaikho pointed out that business activities between China and Bahrain dates back thousands of years ago in the Maritime Silk Road period. .China is now Bahrain’s largest import market with bilateral trade valued of $2.2 billion. He is looking forward to the cooperation between the two nations. Prioritizing on Digital Silk Road, Bahrain actively promotes cooperation and knowledge exchanges with China in emerging technologies such as fintech and artificial intelligence. As an outstanding example, Huawei’s technologies helped Bahrain become one of the earliest countries that launch 5G network for commercial use. Enterprises in Bahrain are now actively looking for potential Chinese partners to strengthen their performance in key areas and benefit the businesses from both countries.
H.E. Mr. László Havas, Minister of Financial Affairs, Embassy of Hungary to China, stated that Hungary embraces China’s further opening up of financial industry, and also holds an optimistic attitude toward the prospects of Chinese financial sector. Hungary was the first country to issue Dim Sum Bond and Panda Bond, and the first sovereign state in the world to successfully issued “a green Panda bond” in China. As a member of AIIB and MCDF, Hungary plays an important role in the development of the Hainan Free Trade Port and the promotion of infrastructure connectivity of the BRI. Hungary is willing to promote bilateral cooperation with China in terms of epidemic prevention and control, industry recovery and sustainable development through BRI.
Ms. GUO Mingshe, Vice President & Secretary-General, China Association for Promotion of Development Financing said that the triple-whammy of Covid 19, climate crisis and geographical changes has been a severe shock to the industrial chain, supply chain and global production network, as well as international trade in goods and services. In developing countries with fragile economic structures, the impact could only be worse. Now, it should be our top concern to seek a sustainable, healthy and stable path to recovery and development for the whole world. The key to innovation for the financial sector lies in eliminating financial discrimination and seeking financial equality for all. Moreover, building a more inclusive financial system that provides more effective, accessible and affordable services should also be a priority in future financial reforms.
Mr. HE Zhenwei, Chairman of China Overseas Development Association expresses his willingness to attend CIFTIS’s forums and other events to build platforms for cooperation. The Joint Exhibition of International Financial & Innovation Centres invites elites and leading organizations worldwide, showing the international attention and expectations of financial, investment and financing markets in China. We should firstly use this opportunity to meet Chinese firms that aim to go abroad, promoting multilateral investment and financing cooperation. Secondly, we should promote cross-border investment and multilateral cooperation. This year’s World Innovation Investment Forum and Global Sovereign Wealth Fund Forum provides both local and international enterprises with sound consultancy and support. The exhibition has promoted the signing of MOUs and cooperation agreements, setting examples for multilateral financial organizations to cooperate in areas such as outbound investment and finance, development financing, innovation finance and the development of China Western Financial Centre.
Mr. Kuanysh AMANTAY, General Representative in China and East Asia, Kazakh Invest National Company stated that Kazakhstan enjoys a close tie with Chinese firms in trade and energy cooperation. For example, China exports goods to Kazakhstan, and through the Caspian Sea and the Black Sea, these goods can reach Europe. Green energy projects, from photovoltaics to wind power, are developing rapidly in both countries. As for the financial sector, there has been a close connection at all levels between AIFC and Chines stocks, investment banks, and asset management organizations, which catalyzes further breakthroughs in the RMB Internalization as well as Investment and Financing for Central Asia Countries along the Belt and Road. We can see strong momentum in the cross-border cooperation between China and Kazakhstan.
Mr. Calvin Fu, Chairman of China Innovation Finance Institute said that the economic and investment cooperation between China, Europe and the six Gulf Cooperation Council Countries is entering a new stage. On one hand, investors and companies in Europe and Gulf Countries share China’s interest brought by its economic growth and innovation development. On the other hand, a growing number of top Chinese enterprises have launched their cutting-edge products, high quality services and solutions in Europe and Gulf Countries. With the successfulness in China, these top enterprises are now starting to customize their business models and innovative technologies for the local market to better serve individual and company, so as to promote local sustainable economy, social development and economic diversification. There lies a huge potential, as Calvin mentioned, in financial and innovation cooperation between China, Europe and Gulf Countries. Furthermore, China Western Financial Centre and Hainan Free Trade Port will no doubt become the new priorities for the internationalization of China’s regional economy, which will prove attractive for international investors and enterprises.
Invest in China: Report Launch, MOU Signing, and Initiate Multilateral-platform
Country Report on Financial Security Index was launched at 2022 CIFTIS. The report, as a comprehensive evaluation of financial security of various countries, establishes a reliable real-time risk monitoring index, aim at helping governments, enterprises and research institutions forecast financial risks, protect financial development and innovation, and promote the healthy development of the real economy. Dr. ZHOU Daoxu, Director of the Financial Security Research Center of Institute of Financial Research (IFR), and Dr. MA Tianping, research fellow, Financial Security Research Center, both from Tsinghua University, introduced the report on the event.
Two MOUs were signed by the relevant attending and organizers of the conference.
China Overseas Development Association, China Association for Promotion of Development Financing, Federation of International Financial Centres and International Innovation Centres and China Innovation Finance Institute signed an MOU to facilitate multilateral cooperation to promote dialogues and exchanges, sustainable economic growth, outbound investment and financing, development financing, innovation finance, the construction of a China Western Financial Centre, innovation investment and financing of BRI, etc.
Kazakh Invest National Company and Federation of International Financial Centres and International Innovation Centres signed an MOU to jointly promote China-Kazakhstan cross-border investment and finance.ng, BRI cooperation on financial services and innovation investment, and cooperation in Western China Financial Centre.
The signing of a multi-international Business Strategy Memo, as a highlight of the Achievement Release event, displayed not only the pragmatic needs of international trade in services and investment but also the important role CIFTIS played in the context of high-level opening-up.
On the Achievement Release event, the China-Europe Innovation Alliance and the China-Gulf Innovation Alliance were initiated under the witness of all attendees. The two alliances will play active roles in building a multilateral cooperation network that allows innovative and comprehensive cooperation between China and Gulf Countries in economy, investment, trade, technology, governance, diplomacy, arts etc.
Highlights of the Three Online International Forums
The event has also reviewed the three online international forums co-hosted during 2022 China International Fair for Trade in Services (CIFTIS), namely the Global Sovereign Wealth Fund Forum, China-Europe Innovation Investment Conference and China-Gulf Innovation Investment Conference. On these forums, more than 70 senior officials, ambassadors, business leaders, experts and scholars from more than 20 countries and 50 institutions offered their constructive perspectives.
H.E. Mr. Mervyn King, former governor of the Bank of England, professor of law at New York University and emeritus professor of economics at the London School of Economics and Political Science, pointed that we live in a world full of radical uncertainties. Western central banks have placed too much emphasis on quantitative forecasts of economic growth and inflation. He believed that instead of attaching great importance to economic forecasts from unrealistic models, economists should spend more time studying current economic situations when they lacked necessary information. And he hopes that governments and central banks around the world could cope with the challenges to ensure a prosperous future by improving understanding and cooperation. Meanwhile, he stated that after the financial crisis, the G7 countries realized the importance of cooperation in managing risk. This trend can also be seen in G20. However, for the G20 countries, there is still a long way to go in terms of strengthening cooperation. Finally, he made it clear that despite rising tensions between China and the US, the future of the world depends on extensive cooperation between the two powers. This is the only way to ensure the prosperity of all countries in the world. The world relies on China and the US, and their cooperation could yield huge returns.
H.E. Mr. LOU Jiwei, standing committee member of the 13th CPPCC National Committee, chairman of the Committee of Foreign Affairs, former minister of the Ministry of Finance of the People’s Republic of China and former chairman and CEO of China Investment Corporation (CIC). Lou reviewed the mechanism of China Investment Corporation in his speech. Firstly, CIC centers on asset allocation to diversify investment, and has established an asset allocation structure with active adjustment and passive adjustment discipline regulations. Secondly, CIC sticks to financial investment. In the early period, CIC focused on passive investments in the primary and secondary markets. As their capacity improved, CIC increased the scale of active investment accordingly. CIC does not seek control of direct investments. Thirdly, CIC has established a transparent and standardized management system, investment decision-making and risk management mechanism. Government approval is not needed for CIC to make investments. Collective decisions are made internally with all non-conflicting departments being able to vote. The CEO only have veto power.
Fourthly, CIC adopts net present value as the accounting basis for all investments. The investment performance is audited by independent external auditors and disclosed on an annual basis, along with the asset allocation framework structure and large direct investment projects. Fifthly, CIC adheres to long-term investment philosophy. It takes long-term rolling absolute return as the performance benchmark, moderately tolerates short-term performance fluctuations, and obtains risk-adjusted long-term returns. Sixth, CIC adheres to the principle of responsible investment. In addition to corporate governance and transparency, CIC also implements ESG investment philosophy.
H.E. Mr. ZHAI Jun, special envoy of the Chinese government on the Middle East issue and former vice minister of the Ministry of Foreign Affairs of the People’s Republic of China, believed that the China-Gulf Innovation Investment Conference is a vivid expression of the deepening cooperation between China and the GCC countries. He pointed out that the two sides has built a win-win cooperation pattern characterized by stability and innovation, laying a solid foundation for shared prosperity. Zhai further explained the close cooperation between China and the Gulf Arab states in four aspects, namely political mutual trust, practical cooperation, humanistic exchanges and promoting regional peace and security.
H.E. Mr. JIN Wei, member of standing committee of the People’s Government of Beijing Municipality and vice mayor of Beijing, said that innovation investment is an unstoppable trend and the financial industries, including innovation investment, are ushering in a new round of opportunities. He pointed out that in recent years, Beijing has given full play to its multiple advantages, like policy, markets, talent and technology, and has actively seized opportunities to make financial industry the anchor of its high-quality economic development based on its strategic positioning of the national financial management center. He also looked into the future of Beijing. Beijing will grasp the favorable opportunity in the new round of financial opening up of China and seize the major strategic opportunities of the construction of “two zones” and the international innovation center of science and technology. The Beijing municipality will strive to develop its modern financial industry to match the status of a large country’s capital so as to keeping injecting new impetus into its high-quality development in the new era. He expressed that Beijing will work to promote the construction of “two zones” in the financial sector and strive to take the lead in such aspects like financial markets’ openness, cross-border capital flows, investment and financing facilitation, in order to create a new platform for two-way opening of the financial industry. At the same time, he emphasized that Beijing will do its utmost to enhance its financial soft power and create an international first-class financial business environment through deepening the supply-side structural reform in the financial sector, building the FinTech innovation center and the green financial center, and improving the financial investment development pattern.
H.E. Sir. Danny Alexander, vice president of Asian Infrastructure Investment Bank (AIIB), pointed out that investment requirements rise to over $3.1 trillion annually in Asia to achieve net zero by 2050 in terms of mitigating climate risks and adapting to climate change. There is a massive lack of financing and investment related to coping with climate change in Asia. Only by reducing risk and introducing market standards to channel private sector capital, will we be able to meet the targets set in Glasgow and in the Paris Agreement last year. In this regard, sovereign wealth funds play a particular role. In the meantime, he added that not a single nation or institution can solve the challenge alone. The capital and finance from both public and private sources, including Sovereign Wealth Funds, are needed to achieve the scale and pace of change required. And Sir Alexander said he was delighted to see more and more sovereign wealth funds addressing climate change and sustainability-related issues.
Mr. WU Jianli, vice chairman of the National Council for Social Security Fund (NSSF), expressed that sustainable investment ideas like ESG are receiving growing attention and becoming an important investment strategy for global sovereign funds and pension funds. He said that the new development stage, carbon peak and carbon neutrality targets have provided an unprecedented opportunity in sustainable investment for institutions represented by NSSF. They have also created a historic opportunity for the asset management industry. He pointed out that NSSF has made constructive exploration and accumulated its experience in the field of sustainable investment, which includes: (1) to attach great importance to environment through implementing negative screening of investment targets in the activities of direct equity investment, actively grasping opportunities of green investment among different asset classes, and actively increasing green bond investment, etc., (2) to put emphasis on social responsibility and to aim at serving major national strategies and fulfilling social responsibility and benefiting the people in terms of the investment and operation of the funds, (3) to pay attention to institutional governance, and help to optimize the internal governance structure of the investees, by implementing strategies such as negative screening and shareholder activism in investment varieties, like domestic stocks, domestic bonds, bank deposits, etc. Moreover, Wu stated that the social security fund has followed the trend of the time and looked for ways to deepen the practices of sustainable investment. The measures they would take, according to Wu, includes (a) to further enrich the new connotation of responsible investment, (b) to explore the way to construct a systematic and comprehensive management system of sustainable investment, (c) to actively grasp market opportunities, and (d) to strengthen the exchanges and cooperation of sustainable investment.
H.E. Dr. Marc Hübsch, ambassador of the Embassy of Luxembourg to China, stated that prior to the current situation, tensions and risks were rising and the ongoing COVID crisis which further destabilized the world and which could be a catalyst for a retreat from the global mindset in the short-term. And he noted that the world is now witnessing a rapid and substantial loss of trust among international trade and investment partners. But he emphasized that there still exists a large room for the cooperation between China and Europe. What’s more, he expressed that along with the rapid rise of the new economy, they welcome and support the efforts undertaken by the Chinese government to create room for financial innovations and to offer more investment choices for Chinese households, in line with the common prosperity agenda. And he strongly believed that a commitment to further open up trading relations between China and Europe through capital markets will not only be mutually beneficial, but also live up to the shared responsibility for global economic and financial stability.
H.E. Dr. Ali Obaid Al Dhaheri, ambassador of the United Arab Emirates to the People’s Republic of China, expressed that the UAE warmly welcomes foreign capital as well as promising start-ups and tech companies, including Chinese enterprises, to invest and do business in the Emirates. And he pointed out that in addition to the financial sector, their technology-driven industries including communication, education, renewable energy, aerospace, nuclear power, artificial intelligence, and automated cars, are increasingly becoming new growth points in the Emirate economy that are able to attract more foreign investment, which will further enhance the cooperation between UAE and China.
H.E. Mr. ZHOU Yanli, member of the Economic Committee of CPPCC and former vice chairman of the China Insurance Regulatory Commission (CIRC), opined that it is meaningful to discuss ways to expand cooperation in China-Europe finance and promote high-quality development of trade in services at the conference. During the recent years, the financial institutions of China and Europe has taken market demand as the guide to enhance the support of financial business for foreign trade enterprises and ones involved in trade activities. Furthermore, Zhou pointed out that there have been more financial institutions co-created by China and Europe whose financial markets were deeply integrated. And he added that China and Europe also set up a multi-level financial policy coordination and dialogue mechanism to exchange views and coordinate stances on issues of common concern. Also, he emphasized that at a time of deepening globalization and a global shift in political and economic situations, the coordination of financial policies and the exchanges of financial supervision experience between China and Europe are conducive to promoting the reform of global governance structure and to maintaining the financial stability between China and Europe or of the world.
H.E. Mr. GAO Xiqing, chair professor of the University of International Business and Economics, former vice chairman of China Investment Corporation, former vice chairman of National Council for Social Security Fund of China and former vice chairman of China Securities Regulatory Commission, pointed out that five major changes have taken place in the field of international investment. The first change is in the international division of labor. Due to the impact of the global pandemic on transportation and of geopolitical factors, changes are taking place in the aspects of production and transportation and demand of all countries. He opined that the second change can be seen in the trade and transportation of international goods in large global markets affected by trade and geopolitical conflicts. For the third change, there are less people-to-people exchanges among countries because of the conflicts and the decline in mutual understanding. The fourth one is the change in international investment patterns due to geopolitical and ideological reasons. The fifth one is the change in technological development such as blockchain, which is exerting an impact on financial and capital flows across borders.
H.E. Mr. Rahul Ahluwalia, minister-counsellor of British Embassy to China, noted that the UK and Chinese companies are at the heart of driving the global green transition in areas like electric vehicles, renewable energy and sustainable finance. Taking Geely’s brand new Lotus factory in Wuhan, he reckoned that the cooperation between the two countries enjoys broad prospects when the combination of UK’s design and automotive expertise and China’s EV battery technology. Moreover, he pointed out that since COP26 was held in the UK last November, Chinese banks have raised billions of dollars of green bonds in London to invest in sustainable projects around the world. And he added that more opportunities await to be found in insurance, pensions and ESG investing fields.
H.E. Ms. Suzanne Streit, counsellor of the Embassy of Switzerland in China, stated that on the bilateral financial cooperation, Chinese and Swiss authorities have maintained regular exchange. And last year, a working plan was adopted to help enhance the bilateral financial market cooperation. And she added that end of July this year, the China-Switzerland Stock Connect was successfully launched, allowing for the first time Chinese companies to list at the Shanghai and Shenzhen Stock Exchanges to trade Global Depository Receipts and raise funds at the Swiss Stock Exchange in Zurich. Besides, she said that further cooperations in banking and wealth management as well as in insurance and reinsurance are also on the way between China and Switzerland. And she pointed out that in all those areas, we can see considerable potential for cooperation between China and Switzerland. Meanwhile, she expressed that on a broader scope, Switzerland is following China’s opening up measures very closely and appreciates all measures taken by China in the past years.
Ms. Julie Becker, chief executive officer of the Luxembourg Stock Exchange and founder of Luxembourg Green Exchange, said that the Luxembourg Stock Exchange, as a major listing venue for international bonds, has been working very closely with Chinese issuers to facilitate their accession to international capital markets and reach global investors. Their cooperation with China has expanded into the field of sustainable finance. Many successful joint initiatives with Chinese partners took place in recent years, notably in the fields of listing, information dissemination and indexes. And she believed that these progresses are all perfect examples to showcase how the financial industry is able to propel innovative, sustainable investment opportunities that drive inclusive growth.
H.E. Mr. Yernur Rysmagambetov, chairman of the management board of AIFC Authority, pointed out in his speech that AIFC has always given priority to the BRI since its establishment. And he stated that the development of regional offshore RMB market is also a key priority for AIFC. AIFC, according to Rysmagambetov, will work to connect Central Asia with China and support China’s efforts to establish closer ties with the Middle East, Europe and other regions through Central Asia.
Mr. Renat Bekturov, chief executive officer of Astana International Exchange (AIX), noted that the past few years have witnessed substantial progress in the relationships between Kazakhstan, China and GCC counties in political, economic, and various other fields. Through collaboration and support, an offshore RMB market and the related infrastructure have been established in AIFC to ensure the low-cost, efficient, and smooth operation and safety for the use of RMB. In the meantime, he stated that Astana International Financial Centre and Astana International Exchange will strive to become a regional capital market center to support the further progress of BRI.
H.E. Mr. Alessandro Golombiewski Teixeira, former minister of Brazilian Ministry of Tourism and former president of Brazilian Agency for Industrial Development, noted that many countries, especially developing countries, are exploring their ways to finance and invest in an innovative manner. However, as he emphasized, cooperation is the only magic. International cooperation and investment for public good are the essential ingredients. Besides, he mentioned that during the COVID-19 pandemic, the world was, at first, chaotic. Many countries were busy safeguarding their own interests. In contrast, some, including China, gave out their helping hands and then defused the nasty situation. Thus, he expressed that cooperation would promote innovative development.
Mr. Làszló Bencsik, deputy CEO and chief financial and strategic officer of OTP Group, noted that China, as a major power of the world’s economy, has the potential to offer substantial investment opportunities. Thanks to China’s economic opening-up policy, China’s financial system is maturing year by year. Investors all hold a positive view towards China’s development in the new era and are all willing to take part in it. He opined that the consumer finance business field can prove a favorable area of investment for foreign companies. The OTP Group is willing to provide new techniques for the financial system. The opening-up policy has built Hainan into an ideal destination for investment with an effectively set-out plan covering almost all the important aspects that an investor needs to consider. The OTP Bank’s Representative Office in Beijing has been following Hainan Free Trade Port closely since the very beginning. He believed that Hainan has the potential to be the first step for them to enter the vast land of opportunities in China’s financial sector.