BEIJING, Sept. 27 (Xinhua) -- Financial integration plays a vital role in developing the Belt and Road Initiative (BRI). Over the past five years, cooperation on financial integration kept deepening thanks to China’s policies that highlight market-oriented operation and joint efforts of Chinese financial institutions and enterprises and institutions in countries and regions along the Belt and Road.
-- Multi-layer financing system taking shape
In early September, the consortium consisting of Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) completed acquisition for 25 percent stake in Dhaka Stock Exchange (DSE).
"It helps open a wide space for China-Bangladesh cooperation in the capital market in the future," said KAM Majedur Rahman, managing director of Dhaka Stock Exchange, adding that Chinese enterprises operating in Bangladesh are welcomed to be listed at Dhaka Stock Exchange. He also hoped that Bangladeshi enterprises can issue shares in China.
There have been more examples of win-win cooperation over the past 5 years in financial fields.
Hongshi Holding Group issued 300 million yuan bonds in this Januaryto suppor construction of the projects under the BRI in Laos ; in 2015, China's three stock exchanges and the Deutsche Börse AG jointly established the China-Europe International Exchange(CEINEX) in Frankfurt.
According to an official from the People's Bank of China (PBC), the opening of direct financing channels has enabled enterprises engaged in the development of the BRI to utilize financial resources from both domestic and overseas markets and raise funds from the capital markets by IPOs, re-financing and bond issuance.
Cooperation has been extensively promoted not only in the capital market but also among insurance and financial institutions. In addition to providing insurance products and services, the institutions also directly invest in projects related to the BRI.
In 2015 and 2016, for instance, Taiping Financial Holding and ICBC International Holdings Limited jointly launched and invested in two phases of funds to provide financial support for projects under the BRI with a total size of 6 billion HK dollars.
Moreover, the Silk Road Fund has signed contracts on over 20 projects by the end of this June, being committed to investing 7.8 billion U.S. dollars.
Along with financial integration, cooperation in financial infrastructure is also underway.
Over the past five years, Chinese financial institutions have been continuously improving their project preparation processes and innovating risk sharing mechanisms to help improve local business environment as well as strengthen the appeal of capital investment from private sector.
The Bank of China (BOC) has held five sessions of BRI-related training programs involving countries like Cambodia and the Philippines.
-- Fruitful outcomes with financial support
Most countries along the Belt and Road are developing countries which need huge amount of financing for infrastructure construction and other key projects. Chinese financial industry has presented remarkable cooperation achievement over the past five years.
To support the construction of the Nam Ou 4 of hydropower project (phase 2) in Laos, China Development Bank (CDB) provided a loan of 770 million U.S. dollars; to bolster the floating liquefied natural gas (FLNG) project (block 4) in Mozambique, the bank consortium led by the Industrial and Commercial Bank of China (ICBC) lent nearly 5 billion U.S. dollars syndicate loans.
By the end of 2017, CDB had issued loans totaling more than 180 billion dollars for projects in BRI countries; BOC had completed credit granting of around 100 billion dollars for the countries along the Belt and Road.
"The banking financial institutions in China not only offered credit fund but also developed a sound system in which development financing, policy financing and commercial financing play their respective roles while supporting each other," an official at PBC said.
-- Wider road to inclusive cooperation
The BRI highlights openness and inclusiveness. Over the past five years, the BRI has been responded not only by China-funded financial institutions but also by their foreign counterparts as well.
The Standard Chartered Group pledged that by the end of 2020 it will, by teaming up with syndicates, provide financial support worth no less than 20 billion U.S. dollars to BRI-related projects. HSBC reported steady growth in 2017 in cross-border business revenue related to cooperation with countries and regions along the Belt and Road routes.
China-foreign cooperation and exchanges hold great prospects. For example, the PBOC has started joint financing with multi-lateral development banks such as the International Finance Corporation (IFC) under the World Bank and the Inter-American Development Bank (IADB). By the end of this June, PBC has invested in 150 projects across about 60 countries.
-- More actions in the future.
The ICBC indicated that it will promote the establishment of an inter-bank mechanism for normalized cooperation and try to become a top financial service provider under the BRI framework.
According to a PBC official, the institution will continue to provide financial support for the development of BRI by promoting financial integration and a complete multi-lateral system.
Zhang Wencai, vice president of the Asian Development Bank (ADB), noted that ADB will focus on strengthening coordination among relevant countries and multi-lateral institutions, and dovetailing the existing mechanisms with the BRI.
"HSBC will continue to grasp the development opportunities brought to financial institutions by the BRI, and strive to build an important channel for Chinese and foreign companies to participate in related projects," noted Zhang Wenjie, vice president of HSBC Bank (China).
It is expectable that a road towards open and inclusive financial integration and cooperation will continue to extend on the world map, bringing benefits to all.
( Contributed by Xu Sheng, Wu Yu;edited by Yang Qi, kateqiyang@xinhua.org)
