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Shenzhen: The New Payment Innovation Center of Asia

2019-09-24 16:47 Tuesday

On August 18, the State officially issued its "Opinions on Supporting Shenzhen's Pioneering Demonstration Zone with Chinese Characteristics". The document has aroused great interest from all sections of society. From the special economic zones to the pilot demonstration areas of socialism with Chinese characteristics, Shenzhen is an important window onto the country's reform and opening-up policy, and has been given a new mission in the new era.


Fintech benchmark city

Shenzhen is one of the economic centers of China. Its total economic output has ranked fourth in mainland China for a long time and it is one of the most economically prosperous cities in mainland China. On the Economist's 2012 list of  "The Most Economically Competitive Cities in the World", Shenzhen came second.

Finance is the pillar industry in Shenzhen. Data released by the Shenzhen Municipal Financial Regulatory Bureau recently showed that the value added to the Shenzhen financial industry in the first half of 2019 was 166.3 billion yuan, a year-on-year growth of 7%, 3.6 percentage points higher than the first quarter. Tax revenue (excluding customs duties and stamp duty on securities transactions) totaled 89.4 billion yuan, up 2%, accounting for 24.8% of the city's total tax revenue, up 3 percentage points from the first quarter (21.4%). Finance continued to rank first in all industries.


With the release of the "Opinions", it was mentioned that the demonstration zone would be "supporting innovative applications such as digital currency research and mobile payment in Shenzhen". As early as 2017, the Digital Money Research Institute of the People's Bank of China (DMRIPBC) began to deploy and conduct digital currency research. Since then, the organization has actively established several R&D institutions in various places. For example, in June 2018, Shenzhen Financial Technology Co., Ltd. was established, which is 100 percent controlled by DMRIPBC.

Shenzhen is already the leading city for digital currency research. In the next step, Shenzhen will speed up the deployment of the fintech third-party service industry. At the same time, Shenzhen is embarking on formulating a special support policy for fintech and strives to build itself into the core engine for its development in the Greater Bay Area. The aim is for the city to become a demonstration base of fintech talents standards and the leading area of sustainable fintech development.

Cooperation with Guangdong-Hong Kong-Macao Greater Bay Area

The Shenzhen government has always attached importance to the development of emerging technologies such as smart manufacturing, digital economy, big data, cloud computing, artificial intelligence, 5G, and more. It has successively issued the "Shenzhen City Cloud Computing Development Action Plan (2016-2017)", the "Shenzhen Action Plan to Promote Big Data Development (2016-2018)", "China Manufacturing 2025 Shenzhen Action Plan", and the "Shenzhen Promotes Fifth Generation Mobile Communication (5G) Innovation Development Action Plan (2018-2020)" along with Shenzhen City policy documents such as the "Next Generation Artificial Intelligence Development Action Plan (2019-2023)". All of these publications have led to the rapid development of strategic emerging industries. The construction of a comprehensive national science center with Shenzhen as its main campus will play a key role in the construction of the International Science and Technology Innovation Center in the Greater Bay Area of Guangdong, Hong Kong and Macao.


Shenzhen is positioned as a national economic center city and a national innovative city. Under this positioning, Shenzhen has been active in high-tech business incubation, space optimization, cultural innovation, and talent introduction. In the first half of the year, the GDP data for various cities in China has been released. Under the influence of the external situation, Shenzhen continues to lead the first-tier cities with a growth rate of 7.4%. The highly market-oriented institutional advantages and the cultural advantages of multiple freedoms and equality are the key factors driving Shenzhen's economic competitiveness. Its institutional advantages are reflected in many aspects, including innovation and the prominence of Shenzhen's private economy.

It is foreseeable that Shenzhen will receive a new mission to build a pioneering pilot demonstration area of socialism with Chinese characteristics, and its emerging technology industries such as smart manufacturing, digital economy, big data, cloud computing, artificial intelligence, and 5G will surely usher in greater development. Shenzhen's construction of the Greater Data Center in the Greater Bay Area of Guangdong, Hong Kong and Macao will become the core engine for development, driving the growth of the overall digital economy and related emerging industries in the region.

Foretaste of cross-border finance

In the cross-border financial sector, Shenzhen has a number of pioneering and pilot policies, including cross-border loans and cross-border asset transfers. In 2018, under the guidance of Shenzhen PBC, Qianhai Financial Assets Exchange submitted an RMB settlement pilot program for cross-border transfers of all types for accounts receivable claims and received support. Under the premise of legal compliance and due diligence, the exchange completed the country's first cross-border transfer of RMB related to the settlement business of asset-based factoring.


Since the beginning of this year, Shenzhen Foreign Exchange Administration has once again launched a number of facilitation measures for cross-border financing, which will facilitate enterprises in the region to flexibly use both domestic and overseas markets and resources to ease the "funding difficulties and financing" of enterprises. In addition, the People's Bank of China's trade finance blockchain platform has been in trial operation in Shenzhen for nearly one year. The platform has realized multi-level financing of supply chain accounts receivable, cross-border financing, international trade account supervision, and external payment tax filing forms. The micro-pass-through business is also expected to be integrated on the chain.

In the field of "promoting mutual trust in Hong Kong and Macao financial markets and mutual recognition of financial (fund) products", the Shenzhen Greater Bay Area is advancing the internationalization of the RMB and piloting innovative cross-border financial supervision schemes. Since the first batch of mainland Hong Kong Mutual Recognition Funds was officially registered in December 2015, a total of 20 North Mutual Recognition Funds have been approved.

Strong alliance with Hong Kong, China

Hong Kong and Shenzhen will be strong and united in playing their role. Hong Kong has the advantage of its financial industry and is China's window onto the world. Shenzhen's science and technology industry leads the country, and the two have joined forces to become the strongest link in the Greater Bay Area. At the same time, Hong Kong and Shenzhen are geographically adjacent to each other. The two places already have a cooperation foundation, so Shenzhen will give priority to Hong Kong resources.

This year, the 2019 Payment Asia Summit will be relocated to Shenzhen. I also hope that with the new opportunities ushered in and the advantageous geographical location of Hong Kong, our conference will be the icing on the cake. I hope that the conference will make more contributions to the fintech and payment industry in Shenzhen. It will bring more timely and accurate policy support information and the latest trends of the payment industry to the guests. I look forward to sharing the event with you!

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