China’s Banking Regulator Vows More Support to Belt and Road Development

A passerby walking in front of the Poland branch of the Bank of China in Warsaw, the country’s capital city. Officially started operation on June 6, 2012, the bank has had full access to the financial market of Poland, providing high-quality financial services for Chinese and Polish clients from the industrial, commercial and financial sectors as well as for individual customers. Its services include deposit, loan, remittance of local and foreign currencies, foreign exchange transactions, trade finance, and guarantee, etc. The branch is the first Chinese bank officially operating in Poland.

China’s banking regulator vowed to provide more support to the development of the Belt and Road initiative, saying that the banks and financial institutions will be encouraged to offer greater funds to projects related to the policy.

“In recent years, China’s banks and financial institutions have been motivated to improve their capabilities to establish a multi-layered, long-term, stable, sustainable financial service platform with controllable risks for the Belt and Road development,” said Wang Zhaoxing, deputy head of the China Banking Regulatory Commission (CBRC).

Wang added that the banks were asked to cope with the risks and challenges confronted by the Belt and Road construction and that other financial institutions, guided by the regulator, have accelerated their pace to build financial service networks for the assembling of the Belt and Road project.

“They have made prominent achievements in distributing their overseas branches, improving cross-border financing ability, innovating products and services, and expanding openness to the overseas market. Since the Belt and Road initiative was put forward in 2013, the banking regulatory body has established work mechanisms, enhanced overall planning, and effectively implemented each measure and policy,” Wang said.

The CBRC also requires banking and financial institutions to enhance their management in credit risk, country risk, compliance risk, as well as environmental and social risks by clarifying standards for their overseas operations.

The banking and financial institutions also optimized their layout in Belt and Road countries, thanks to efforts made by the CBRC.

Data showed that by the end of 2016, nine Chinese banks established 62 primary affiliates in 26 participant countries to the Belt and Road initiative, including 18 subsidiaries, 35 branches, and nine representative offices.

Banks from Belt and Road countries are being encouraged by the CBRC to expand their operations in China as well.

As of the end of last year, 54 commercial banks from 20 Belt and Road countries established subsidiaries, branches, and representative offices in China.

The CBRC also encourages Chinese banking and financial institutions to improve their cross-border financing services and loan more to programs related to the Belt and Road initiative on preconditions of controllable risks and sustainable potential.

Banks were also asked by the regulatory body to render more support to implementation of the initiative and construction of major projects.

“The CBRC has launched various forms of cooperation with its foreign counterparts in countries along the Belt and Road. In the future, the organization will sign cooperation memorandums of understanding for mutual regulation with en-route countries, based on their political and economic situations, as well as the will of the banking and financial institutions,” Wang said.

The official furthered that the CBRC will explore the possibility to set up a regional cooperation system on financial regulation.

He noted, “The banking and financial institutions should take the historical opportunity of the Belt and Road construction for a better and internalized growth.

In addition, they should keep enhancing win-win cooperation with Belt and Road countries for common development.”

[Source: People’s Daily]