More foreign banks arrive as Chengdu becomes financial hub
With two foreign banks setting up new branches in Chengdu in May, the capital of Sichuan province has made another step towards its goal to be the financial hub of western China.
By the end of July, the city had 16 foreign banks including Standard Chartered, Citibank and JP Morgan Chase. The city's local corporate financial institutions are also growing rapidly with a variety of products hitting the market.
According to data from the municipal government, the city generated 484.3 billion yuan ($79.1 billion) in GDP in the first half of 2014, with the financial sector generating 10.3 percent of the total. Gross profits in the financial sector reached 49.8 billion yuan, up 13.8 percent.
The Chengdu city government released a plan in May to develop a service-centered city with the objective of becoming "the most robust and innovative financial hub". By 2015, profits in the financial sector will account for 20 percent of the service sector, said the report.
More foreign banks
In May, ANZ Bank and Hang Seng Bank opened branches in the city.
Michael Smith, CEO of ANZ Bank, told Xinhuanews that Chengdu plays a significant role in the economic growth of western China, a region ANZ has targeted as a key market.
Xu Bin, director of Hang Seng Bank's Chengdu branch, told People's Daily in July that the bank has set up operations in many Chinese cities, but Chengdu impressed him the most with so many big real estate companies from Hong Kong.
"Almost all of real estate big names are here, and also many HK companies. We feel we have to come here too," said Xu.
Chengdu has formulated a range of policy measures that add appeal for foreign financial institutions including cross-border renminbi settlement and mobile e-commerce services.
The city government also has policy support for foreign financial institutions that are developing innovative new services like e-commerce. The city now has the most foreign financial institutions of any central or western city, said experts.
Its 16 foreign banks have total assets about 34 billion yuan, a small number compared with the city's total bank assets of some 5 trillion yuan. Yet an official from the city's financial administration office said the foreign institutions have a substantial impact on Chengdu's economy.
The official said the banks are from different regions and countries and specialize in various businesses that can support local businesses in a more comprehensive way. With deep experience and good traditions, the foreign financial institutions also trigger reforms at local banks in the city, said the official.
The city government also stresses nurturing local corporate financial institutions to provide services in economic and social development.
The government has helped set up a range of new local corporate financial institutions in the recent years. The Bank of Chengdu and Chengdu Agricultural & Commerce Bank are also growing rapidly.
Sichuan Jincheng Consumer Finance is one of four consumer finance companies approved by the China Banking Regulatory Committee and the only in the central and western regions.
The company's general manager Huang Qili said that the major businesses of the company include installment payments and loans for consumer goods like mobile phones and home renovation, and for services like weddings, travel and education.
Chengdu Tianfutong Financial Services Co is working on a third-party electronic payment system. The company's latest product, the Tianfutong card, allows users in the city to pay for public transport and water, gas and electricity with just a swipe.
Zhou Jun, a staff member in the company's marketing department, said that more than 10 million Tianfutong cards have been issued and every day the cards average 3.8 million transactions. People can also use the card for movies, shopping at supermarkets, dinning and even travel at the city's major tourism spots.
The card now covers suburban areas around the city. The company has been working on expanding its service area to cover cities near Chengdu.