“Judging by the trade figures and development space, the Pearl River Delta, with its privileged geographical position, has the potential to become a financial center.” says George Sartorel, Regional CEO of Allianz in Asia Pacific.
Another financial tycoon, Zhang Zhijian, managing director of the department of commercial banking service, UOB Group, values more the opportunities available in Guangdong Pilot Free Trade Zone.
Indeed, more and more foreign-funded financial institutions set their sights on Guangdong. When asked what to look for here, many financial tycoons provide different answers, most of which center on the same buzzword— “financial ecosystem”.
Organized by Xie Sijia, Liu Jiangtao, Xie Meiqin, Luo Yanjun, Zhang Ying, Huang Qianwei
Reported by Peng Lin, Huang Qianwei, Guo Jiaxuan, Tang Liuwen, Tang Zitian, Zhang Jun, Long Jinguang, Hu Nan
Edited by Olivia Ouyang, Simon Haywood
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Magnetic “financial ecosystem” can draw in financial institutions
What is “financial ecosystem”? Greg Becker, CEO of Silicon Valley Bank, thinks that an effective “financial ecosystem” relies on the support of the government, venture capitalitists, quality education institutions (proving both technical innovation and a skilled workforce), and the legal and financial industries.
However, Mark Farrell, Mayor of San Francisco attaches more importance to university education, tax policies and the surrounding ecology.
“Outstanding universities can attract students to settle in the ecosystem; tax policies influence companies’ profits and their total number of employees; an ideal environment is necessary for people to enjoy their work and life in the ecosystem.” says Mayor Farrell.
All in all, there is no standard definition of “financial ecosystem”, but one thing is certain—the “financial ecosystem” is a must for the development of the financial industry in a region, as it draws in financial institutions and talent from across the globe.
A good example of where this has happened is London, home to more than 200 foreign banks and over 400 thousand people engaged in finance or finance-related industries.
How can Guangdong develop a “financial ecosphere”?
According to Shi Wei, an economist from the Institute of Economic Systems and Management of the National Development and Reform Commission, Guangdong needs “story-tellers” with an international view and a long-term plan to introduce Guangdong and its advantages to overseas institutions.
Indeed, Guangdong has many strengths when compared with other regions. For example, the overall air quality in the Pearl River Delta is better than that in the Beijing-Tianjin-Hebei Region or the Yangtze River Delta.
Moreover, Guangdong has a thriving financial industry. In 2017, Guangdong enjoyed an increase in social financing, and maintained its nationwide lead in major financial indicators including the scale of cross-border capital flow.
Wu Kegang, President of the British-Chinese Chamber of Commerce in the UK, holds another view that Guangdong also needs to change its current methods of investment promotion.
He thinks that instead of attracting investment from Fortune Global 500 enterprises, Guangdong should mainly introduce financial institutions adjusted to local economic development and SMEs providing services to the financial industry.
Wu’s second suggestion is for Guangdong to provide professional answers to questions from financial institutions. “These institutions will go to Guangdong only on the condition that they have all the answers they need to dispell their doubts.”
Tax reduction is also effective, as Darlene Chiu Bryant, Executive Director of ChinaSF, has pointed out, “San Francisco has celebrated more risk investment and the establishment of more enterprises since the tax rebate in 2011.”
University education and talent may also constitute a key factor, according to tenured Professor Cui Yi from the School of Engineering, Stanford University. He says “a lot more talent will definitely be attracted to Guangdong if the province has universities tied to both Peking and Tsinghua Universities”.