“I expect BRICS member nations may actually enhance the deeper opening-up and cooperation in financial market, including the forex market, bond market and credit market.” On June 11, when attending the BRICS Political Parties, Think-Tanks and Civil Society Organizations Forum (hereinafter referred to as the Forum), Tao Yiping, the president of Industrial Bank (IB), made a speech to call on and suggest establishing a mutual investment channel for bonds, like the “Bond Pass” between the Chinese Mainland and Hong Kong, in the bond market of BRICS nations; enlarge the bilateral currency swap among member nations so as to facilitate enterprises involved in international industrial cooperation to reduce exchange rate risks.
This Forum is the first “three-in-one” dialog among political parties, think tanks and civil society organizations after the BRICS national cooperation mechanism was established. The purpose is to offer wisdom, suggestions and measures for BRICS leaders’ gathering in Xiamen. Liu Yunshan, a member of the Standing Committee of CPC Central Committee Political Bureau and the head of the Secretariat of the Central Committee, attended the conference and made a keynote speech. More than 400 people from political parties, think tanks and civil society organizations of BRICS nations and other developing countries attended the conference, including Song Tao, the minister of the International Department, Central Committee of CPC, You Quan, the Provincial Secretary of Fujian Province, Sergey Naryshkin, the Vice Secretary of the General Committee of United Russia and the former vice chairman of State Duma, Shri Atal Bihari Vajpayee, the general secretary of India's Bharatiya Janata Party.
Finance is the blood of modern economy and unobstructed financial supports can contribute to powerful growth. As the “Belt and Road” construction initiated by China is being deepened, the significance of inter-connection and accessibility of international financial market is more prominent. Since the first meeting of foreign ministers from BRICS nations in 2006, the cooperation among BRICS nations has lasted for 10 years. During these 10 years, the proportion of BRICS GDP in the global GDP has been raised from 22.9% to 30.7%, the contribution to global economy reached 52%. In terms of financial cooperation and market accessibility, some achievements have been made, including the establishment of the international multilateral financial institution the New Development Bank, the setup of the 100B emergency reserve fund to enhance the control of financial risks. Meanwhile, China has signed RMB swap agreements, in a total amount of more than RMB 300 billion, with other four nations so as to keep increasing the ratio of local currency settlement and the scale of currency swap agreements.
Tao Yiping stated that governments mainly build a bridge as for the inter-connection and accessibility of international financial market while the real “players” are enterprises and financial institutions. As the leading shareholding commercial bank of China, IB roots on its inborn advantages and business features, provides comprehensive and diversified financial services and solutions for BRICS nations and relevant enterprises, facilitates the combination and communication in the financial market of BRICS nations.
On one hand, IB extends its reach to peripheral financial services and actively supports entities and enterprises to go global and learn from other countries. As one of the first banks setting agencies in the FTZs in Shanghai, Fujian, Guangdong and Tianjin, IB set up a level I branch in Hong Kong in 2013 and relied on it to offer various kinds of cross-border financial services. By the end of 2016, IB has achieved the balance of financing business from cross-border trades up to RMB 650 billion and the annual cross-border settlement business amount exceeding USD 85 billion.
On the other hand, by relying on the interbank platform, the largest interbank financial cooperation platform in China, IB pushes forward the internationalization strategy, builds the “international interbank platform”, finds the way to build a new type of cross-border financial service platform, expands the client base from China to the globe and the business scope from domestic business to cross-border financial business, thus becoming a bridge promoting the close cooperation among financial institutions at home and abroad. Take the example of cross-border liquidation, IB has now connected 34 domestic and overseas banks to the RMB cross-border payment system, performed international cooperation with 212 overseas banks and provided agency service on international business for 12 domestic small- and medium-sized banks.
“We expect overseas financial peers, especially those from BRICS nations, would join hands with us to contribute to and make the best of this platform.” Tao Yiping said.
Green finance is the key support to green development, which is now a global consensus. As the earliest bank in green finance, IB has been facilitating risk management and product & service innovation all these years, and has formed a green risk evaluation system as well as a system of multifarious and abundant green finance products and services, thus providing over RMB 1 trillion of green funds for over ten thousand enterprises. With ten years of effort in green development, IB has participated in the formation of international green governance systems (such as the Equator Principles), accumulated rich experience in green finance development and now is the leader in green finance field in China. Tao Yiping said BRICS nations and the countries along the route of “Belt and Road” are mostly developing countries. Financial institutions need to bring in “flowing water” to support the combination of economic development with ecological protection, environmental protection and energy conservation so as to boost the sustainable development. In this regard, IB is willing to share its experience and capabilities.
As shown in the BRICS Sustainable Development Report 2017, although BRICS nations are becoming major capital exporting countries, the investment linkage and intensity among these five countries is still very promising. Tao Yiping suggested establishing a cooperation mode and mutual investment channel for bonds, like the “Bond Pass” between the Chinese Mainland and Hong Kong, in the bond market of BRICS nations; enlarge the bilateral currency swap among member nations so as to facilitate enterprises involved in international industrial cooperation to reduce exchange rate risks.