Honorable Vice Premier Liu He, Secretary Li Qiang, Acting Mayor Gong Zheng, Governor Yi Gang, Secretary Guo Shuqing, Chairman Yi Huiman, Ladies and Gentlemen,
It is my pleasure to attend this year’s Lujiazui Forum. Vice Premier Liu He’s remarks for the forum are very important, which highlight the macro design and the general framework for further promoting the development of Shanghai as an international financial center and advancing financial market reform and opening-up. We will work for effective implementation of these requirements under the leadership of the Financial Stability and Development Committee. In 2009, the Communist Party of China (CPC) Central Committee and the State Council set the goal of building Shanghai into an international financial center that matches China’s economic strength and the international status of the RMB. It was in the same year that Shanghai took the lead in launching the pilot program of RMB cross-border trade settlement, with which RMB internationalization set sail. We may well say that the building of Shanghai into an international financial center has started and moved on side by side with RMB internationalization. With over a decade passing by, the RMB has been included in the SDR currency basket of the International Monetary Fund, and Shanghai has achieved significant progress in its development as an international financial center.
Shanghai has had a relatively complete set of financial factor markets, featuring all categories of RMB-denominated financial assets and active trading, with quite a number of major trading indicators ranking high globally.
Shanghai has become home to almost all types of highly internationalized financial institutions. In particular, international financial institutions, headquarters, and functional institutions have been increasing continuously.
Shanghai has become an important hub of RMB internationalization and a pioneer always at the forefront of financial opening-up. Regarding interconnectivity between domestic and overseas markets, Shanghai has served as the linkage not only for the Bond Connect but also for the Shanghai-Hong Kong Stock Connect and the Shanghai-London Stock Connect as well. In terms of RMB internationalization, cross-border RMB settlement in Shanghai has accounted for over 50 percent of the national total; and corporations on the Global 500 list that are based in Shanghai have seen their cross-border settlement in the RMB surpass that in foreign currencies, with the RMB becoming the most preferred currency for cross-border settlement among multinationals in Shanghai.
In recent years, especially in the wake of the COVID-19 outbreak, with the world’s economic and financial landscape undergoing profound changes, Shanghai has been faced with new opportunities and challenges in building an international financial center with higher influence. The People’s Bank of China (PBC) and the State Administration of Foreign Exchange (SAFE) pledge continued support for the undertaking, and will work with the CPC Shanghai Municipal Committee, the Shanghai Municipal Government, relevant agencies, and market institutions to bring the development of Shanghai as an international financial center to a new height. Today I would like to share some opinions for your reference.
First, Shanghai should adhere to its fundamental positioning in the competition among international financial centers, and focus on the development of a financial center based on RMB-denominated financial assets. With China’s economic and financial strength rising continuously, the RMB has become more and more important as an international payment, denomination, trading, and reserve currency. As a result, worldwide demand for investments in RMB assets has been rapidly growing, enhancing the radiation effect of the financial center globally. Currently, China has the world’s second largest bond market and stock market. With a total size of over RMB160 trillion, they have been included in several major international indices. RMB assets in the portfolios of international institutions have amounted to RMB6.4 trillion, increasing at an average annual rate of over 20 percent. In particular, domestic RMB bonds held by overseas institutional investors have witnessed an average annual growth rate of nearly 40 percent in recent years. Going forward, the PBC and SAFE…
Read More: Pan Gongsheng: Speech – 12th Lujiazui Forum