All district people’s governments and municipal committees, offices, and bureaus:

The 14th Five-Year Plan for the Building of Shanghai International Financial Center (2021–2025) is hereby distributed to you for implementation.

July 28, 2021

(For public release)

14th Five-Year Plan for the Building of the Shanghai International Financial Center (2021–2025)

This 14th Five-Year Plan is formulated in accordance with the Outline of the 14th Five-Year Plan for Economic and Social Development of Shanghai and Long-Range Objectives Through the Year 2035 to enhance Shanghai’s capacity and capability as an international financial center and better support China’s reform and opening up.

I. Basis

Under the leadership of the CPC Central Committee and State Council, with the support and guidance of national financial authorities, and following decades of unremitting efforts, substantial progress has been made in building Shanghai into an international financial center. An international financial center commensurate with China’s economic strength and RMB’s international stature has taken shape, laying the groundwork for the next phase of development.

First, the financial market is on an increasingly sophisticated development trajectory and the core functions of a financial center are becoming more visible. Shanghai boasts a complete financial market covering equities, bonds, money, foreign exchange, commodity futures, financial futures, gold, insurance, commercial papers, and trust; is home to numerous financial infrastructures for the registration, custody, clearing, and settlement of financial products; and has launched a range of important financial products and instruments. A full complement of market components and advanced technical capabilities provide strong assurance for the issuance, trading, pricing, and risk management of financial assets. As of the end of 2020, Shanghai Stock Exchange (SSE) was the world’s third-largest stock market by market value. In 2020, SSE ranked first globally by IPO fundraising and fifth by trade volume. The interbank bond market is the second-largest in the world; and Shanghai Gold Exchange is the world’s largest exchange market for spot gold. Shanghai Futures Exchange offers many of the most actively traded products. The crude oil futures market is already the third-largest globally. Total turnover of Shanghai’s financial market hit 2,274.8 trillion yuan in 2020, up 55.5 percent from 2015.

Market pricing functions are strengthening. Market-based rate formation mechanisms, such as Shanghai Interbank Offered Rate (Shibor) and Loan Prime Rate (LPR), are becoming more mature. China Foreign Exchange Trade System’s RMB Index is now a major reference for RMB exchange rate. The Shanghai Key Yield (SKY) has become a key pricing benchmark for the bond market. The prices of “Shanghai Gold,” “Shanghai Oil,” and “Shanghai Copper” are gaining prominence.

Payment and clearing capabilities are improving. Shanghai is now home to a number of key clearing institutions and organizations including the Cross-border Interbank Payment System (CIPS), City Commercial Banks Clearing Co., Ltd., and Global Association of Central Counterparties (CCP 12). UnionPay’s chip card standard has been adopted by the Asian Payment Network for cross-border chip cards, and Shanghai is currently the world’s largest clearing center for bank card transactions.

Risk management capacities are growing. There is an expanding set of risk management tools: The Shanghai Futures Exchange now offers a wide range of futures products encompassing non-ferrous metals, ferrous metals, precious metals, energy and chemicals, as well as option products such as copper options and gold options. The China Financial Futures Exchange lists equity index futures, equity index options, and Chinese government bond futures. The China Foreign Exchange Trade System (CFETS) has introduced foreign exchange swaps, foreign exchange options, interest rate swaps, interest rate options, and other derivatives. A specialized platform for the management of bond collaterals has been set up in Shanghai by China Central Depository & Clearing to improve the default resolution process for the bond market. The Shanghai Clearing House has launched central clearing services for foreign exchange spot, forward, swap, and option products for enhanced risk prevention.

Second, financial reforms and innovation are intensifying, providing a major boost to the real economy. Direct financing has been growing: 17.6 trillion yuan of direct financing was raised in Shanghai’s financial market in 2020, up 91.3 percent over 2015, indicating greater accessibility of financing for the real economy. In addition, Shanghai is the first city in China to pilot such innovative programs as RMB-based settlement of cross-border trades, bonded delivery in futures transactions, individual tax-deferred commercial pension insurance, Qualified Foreign Limited Partnership (QFLP), and Qualified Domestic Limited Partnership (QDLP).

Synergy between Shanghai as a financial center and as a technological innovation center is growing. The Shanghai Stock Exchange launched the STAR Market with the pilot registration-based IPO system; the market’s high proportion of high-tech companies speaks to Shanghai’s exemplary and leadership role as a testbed for institutional reforms of the capital market. Financial services system for sci-tech innovation industries is becoming more sophisticated, as are innovations such as venture debt. Shanghai also has one of the leading fintech sectors in the world, with a host of fintech companies such as CCB Fintech, BOC Fintech, and BOCOM Fintech.

Financial support for key industries, micro, small, and medium-sized enterprises (MSMEs), and integrated regional development is rising steadily. Strategic emerging industries and key projects have priority access to credit support and public listing. Inclusive finance is high on the agenda, demonstrated by the introduction of credit risk compensation and incentive policies, policy financing guarantee funds, big data-powered inclusive applications, and commercial papers market innovations to support MSMEs. At the same time, Shanghai has been exploring new financial service models for the integrated development of the Yangtze River Delta region, making notable progress in multi-regional credit granting and mobile payment.

Third, Shanghai has become an increasingly important gateway to China’s financial market with growing international connectivity and engagement. The financial opening-up measures and innovations being pioneered in the China (Shanghai) Pilot Free Trade Zone (“Shanghai FTZ”) are bearing fruit. For example, Shanghai has set up Free Trade Accounts and is piloting macro-prudential management of cross-border financing, interactive regulation (i.e., regulation with greater industry engagement) of innovative Shanghai FTZ-based banking services, and the registration system for shipping insurance products. The Lingang New Sub-Zone of Shanghai FTZ, which is still under construction, has already launched a number of innovations such as streamlined cross-border RMB settlement services for high-quality enterprises, cross-border transfer of domestic trade financing assets (“forfaiting”), and one-off external debt registration.

Significant progress is seen in financial market interconnectivity. Financial markets including the interbank bond market, foreign exchange market, and money market have stepped up open-up measures. The Shanghai-Hong Kong Stock Connect and Bond Connect are running smoothly. Shanghai-London Stock Connect and China-Japan ETF Connectivity have been launched. Panda bond issuance volume is on the rise. Derivatives referencing the “Shanghai Gold” contract are listed on the Chicago Mercantile Exchange (CME). Chinese stocks and bonds are included in MSCI, Bloomberg Barclays, FTSE Russell, and other major global indices.

Domestic and foreign-funded financial institutions are coming to Shanghai in large numbers. By the end of 2020, Shanghai had 1,674 licensed financial institutions, an increase of 196 since end-2015 and nearly one-third of which are foreign-funded. In fact, Shanghai hosts the largest number of foreign-funded financial institutions in China, separately accounting for nearly half of the incorporated foreign-funded banks, insurance companies, and fund management companies in the Chinese mainland. The ten largest asset management companies in the world have all started doing business in Shanghai. Of the 33 wholly foreign-owned private securities investment funds (WFOE PFM) in China, 29 are located in Shanghai.

Financial cooperation under the Belt & Road Initiative is strengthening. Shanghai-based financial infrastructures have acquired a stake in the Pakistan Stock Exchange, the Dhaka Stock Exchange, and the Astana International Exchange. Shanghai International Centre for Communication and Cooperation between Exchanges was established. CFETS has facilitated the listing and trading, on China’s interbank foreign exchange market, of the currencies of many Belt and Road countries and regions. A growing number of financial institutions from those countries and regions are establishing a presence in Shanghai. Shanghai-based financial institutions are providing increasingly sophisticated services to help domestic enterprises go global.

Fourth, Shanghai’s financial and business environment is steadily improving, markedly raising its influence as a financial center. Shanghai has been strengthening the rule of law in the financial sector and is the first in China to set up a dedicated financial court and financial arbitration court. Shanghai Municipal People’s Congress has issued the Regulations of Shanghai Municipality on Promoting the Construction of the International Trade Center and the Regulations on Local Financial Supervision and Administration in Shanghai. The city has established a local coordination mechanism (Shanghai Municipality) under the State Council’s Financial Stability and Development Committee and the joint conference system for financial stability and coordination.

Stronger credit and consumer protection systems are in place. The Credit Reference Center of the People’s Bank of China (CCRC), headquartered in Shanghai, is a national database of basic commercial and consumer credit information. Shanghai Public Credit Information Service Center has been playing an important role in the market. The Financial Consumer Protection Bureau of the People’s Bank of China, dedicated to building stronger frameworks for the protection of financial consumers, is located in Shanghai. Also established in Shanghai are the China Securities Investor Services Center, China Securities Legal Services Center, and Shanghai Financial Consumption Disputes Mediation Center.

Shanghai has greatly increased its appeal to financial professionals. Under the Shanghai Financial Talent Project, financial talent cultivation and development systems are being optimized and programs for the selection and on-the-job training of financial talent are showing positive outcomes. Pro-talent policies and industry environment are improving along with the rising number and quality of financial talent.

Shanghai’s reputation as a financial center is gaining wider recognition. Shanghai has enhanced urban governance, as its one-stop service portal and AI-powered city governance all help create a more business-friendly environment. Efforts to create a financial hub are bearing fruit—the Lujiazui financial district is the first in the country to introduce the “industry co-governance + statutory bodies” public governance framework, increasing the “carrying capacity” of the “financial belt” along the Huangpu River. The Lujiazui Forum has become a key platform for high-level dialogues between domestic and international financial markets.

Notwithstanding such substantial progress in the Shanghai International Financial Center initiative, there is significant room for improvement for Shanghai, as measured against both the established international financial centers and what is needed for high-quality economic development. In particular, Shanghai needs to raise the local financial market’s global resource allocation capacity, the proportion of international investors, and its pricing power and influence in the global market. Second, Shanghai needs to encourage more high-profile financial institutions to set up regional headquarters in the city, improve the innovation capacity and international competitiveness of local financial institutions, and enhance support to technological innovation and MSMEs. Third, it needs to further expand the range of financial products and derivative instruments on the market. And fourth, it needs to strengthen the rule of law and regulatory regime in support of financial opening-up and innovation programs, raise the proportion of high-end financial talent with international vision or background, strengthen IT and data infrastructures, and further build the capacity to prevent and mitigate financial risks.

 

II. Guiding Directives, General Principles, and Development Goals

(I) Guiding Directives

With the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidance, Shanghai will comprehensively implement the directives of the 19th CPC National Congress and of the second, third, fourth, and fifth plenary sessions of the 19th CPC Central Committee; strengthen the Party’s leadership over financial programs; and ground our efforts in the new development stage, apply the new development philosophy, and create a new pattern of development. With a sharp focus on the three tasks of serving the real economy, preventing and controlling financial risks, and advancing financial reforms, we will hold ourselves to the highest international standard and level and continue to advance the supply-side structural reform of the financial sector; improve financial markets, products, institutions, and infrastructures; enhance financial services; and increase the efficiency of capital supply. We aim to build Shanghai into a central hub of the domestic market and a strategic interface between domestic and international markets, support the high-quality economic development of the Yangtze River Delta region and the country as a whole, and enhance Shanghai’s global resource allocation functions as an international financial center.

(II) Basic Principles

—Target: Promote high-quality economic development. Shanghai will ensure financial programs make serving the real economy as their starting point and focus, adhere to the key principle of “a city of the people, by the people, and for the people,” and promote financial reform and development and enhance financial services based on what the real economy needs and what people want to live a better life. Shanghai will increase financial support to technological innovation and other key areas to facilitate the transition and upgrade of the Chinese economy.

—Priorities: Strengthen role in global resource allocation. Shanghai will pursue high-level institutional opening-up and a high degree of internationalization of the financial sector. It will enhance the service role of the financial market and infrastructures, help financial institutions become more competitive internationally, and strengthen its influence and leadership role as an international financial center.

—Strategic focus: Build the RMB financial market. Shanghai will further financial reforms and innovation, boost the diversity of RMB financial products and instruments, increase the breadth and depth of the RMB financial market, promote the synergistic development of financial markets, improve the market’s functions in innovation, trading, pricing, and clearing, and enhance the global pricing power and influence of RMB financial products.

—Foundations for development: Strengthen the rule of law in the financial sector. Shanghai will improve financial laws and regulations; create a law- and rules-based financial environment in line with international standards; prioritize the protection of property rights, fair competition, and effective supervision; promote law-based administration; strictly regulate the fair and civilized enforcement of the law; and effectively protect the legitimate rights and interests of financial consumers.

—Redline: Prevent and resolve financial risks. Shanghai will assign higher priority to the prevention and mitigation of major risks in the financial sector and seek to accurately identify, promptly discover, and effectively resolve various potential risks. Shanghai will strengthen stress testing, comprehensively bolster its ability as an international financial center to prevent and resolve risks, and ensure that no regional systemic financial risks arise.

(III) Development Goals

By 2025, Shanghai is to possess a significantly higher financial capacity and capability, play a more prominent role in China’s high-quality economic development, cement its position as a center for the allocation of RMB financial assets and risk management, and substantially engage in global resource allocation, in order to lay the groundwork for becoming an international financial center by 2035.

—A global asset management center with a more mature ecosystem to address the asset allocation and risk management needs of investors worldwide. Shanghai will be built into a comprehensive and open asset management center with a high degree of concentration of corresponding institutions, products, markets, capital, technology, and talent, a relatively complete ecosystem, and a sharp increase in asset under management; an important asset management hub in Asia; and one of the world’s leading cities for asset management.

—A fintech center with notably higher international competitiveness to promote the city’s digital transformation. Shanghai will see deeper integration of finance and technology, attract internationally renowned and influential fintech companies to the city, and incubate a number of innovative, widely applicable, and exemplary fintech projects. Fintech will enjoy more application scenarios and become an engine for economic and social development.

—An international green finance hub to promote green economic and social development. Inspired by China’s pledge to achieve carbon peak by 2030 and carbon neutrality by 2060, Shanghai will be fully committed to promoting green development and green finance. There will be a wider range of green financial products, significantly higher innovation capacity in the green finance market, a more complete green financial service system, and more extensive international exchanges and cooperation in green finance.

—A hub for the cross-border use of RMB to make “Shanghai Prices” much more influential globally. The pilot programs of restriction-free RMB use and capital account convertibility will make significant progress; a coordinated onshore-offshore development paradigm will take shape; overseas investors will more deeply engage in Shanghai’s financial market; and building a cross-border investment and financing service center will achieve new milestones. The “Shanghai Prices” for RMB financial assets and major commodities will enjoy greater recognition and influence internationally.

—A magnet for international financial professionals to stimulate their innovation capacity. Adhering to national strategies and market-based approach with a global perspective, Shanghai will build a rigorous, open, inclusive, and efficient talent development system that is compatible with its target of becoming an international financial center. More financial talent from around the world, with a better talent structure, will settle in Shanghai.

—An exemplary financial and business environment with significantly greater soft power as an international financial center. Shanghai will further converge with the world in terms of the financial and legal environment and rules of the market. It will implement an enhanced financial supervision system, develop a greater capacity to prevent and mitigate financial risks, and provide effective protection to financial consumers. Urban public services will continue to improve and the financial and business environment will become much more competitive in the world.

Prospective Indicators for the 14th Five-Year Plan for the Building of the Shanghai International Financial Center (2021–2025)

No.	Dimension	Indicator	2020	2025
1	Market size	Combined market turnover	¥2,274.8 trillion	~ ¥2,800 trillion
2	Direct financing	Direct financing in Shanghai	¥17.6 trillion	~ ¥26 trillion
3		Direct financing in Shanghai as percentage of national total	85%	85%+
4	Financial openness	Proportion of outstanding bonds held by foreigners in the Shanghai bond market	3%	~ 5%
5		Cumulative issue of Panda bonds	¥393.72 billion	~ ¥700 billion
6		International influence “Shanghai Prices”	Promoting market-based formation of interest rate and exchange rate; “Shanghai Prices” such as “Shanghai Gold,” “Shanghai Oil,” and “Shanghai Copper” showing global influence	“Shanghai Prices” for RMB financial assets and major commodities enjoying greater recognition and influence internationally
7	Fintech	Fintech companies	Attracting and fostering fintech companies at an accelerated pace	Home to around 50 leading fintech companies

 

III. Main Tasks and Measures

(I) Improving financial service system to boost capacity to support technological innovation and the real economy

We will pursue innovation-driven development, support technological independence and self-reliance, and enable finance to drive advancement in national strategic technologies. We will help enterprises make breakthroughs in key and core technologies; ensure industries and supply chains are more independent and controllable; find new ways to foster virtuous cycles and interactions among the financial sector, the sci-tech sector, and industries; and empower technological innovations and advanced industries to drive progress in other areas. We will direct more financial resources to public wellbeing programs and promote inclusive finance and finance for elderly care and healthcare.

 

1. Building a financial service system that empowers technological innovations. We will raise the proportion of direct financing and optimize the financing structure to provide more support to high-tech companies; advance the “Light of Huangpu River” initiative to groom a steady stream of high-quality companies throughout their lifecycle for eventual public listing; and leverage SSE STAR Market’s function as a testbed for capital market reforms and its strategic positioning to help the integrated circuit, bio-pharmaceutical, and artificial intelligence industries to tap the powers of the capital market. We will encourage financial institutions to step up support to technological innovation through their own institutional, product, and service innovations; banks to establish fintech divisions, fintech branches, and specialized fintech organizations to provide sci-tech innovation enterprises with integrated solutions for credit financing, financial advisory, venture lending, and merger & acquisition financing; and financial institutions to develop IP pledge financing products. We will promote sci-tech insurance such as first-installation insurance for major technical equipment and new materials insurance. We will attract and foster various types of investment firms that support technological innovation; highlight the role of guiding funds; attract high-quality angel investment, venture capital, and equity investment firms; and incubate a number of influential sci-tech investment firms. We will encourage state-owned venture capitals to carry out mixed-ownership reform to invigorate technological innovation and create an investment and financing ecosystem that addresses the development needs of sci-tech innovation enterprises.

Box 1: Boosting SSE STAR Market’s Capacity to Promote Technological Innovation

The SSE STAR Market and the pilot registration-based IPO system were established to further the innovation-driven development strategy and capital market reforms. Under the leadership of the China Securities Regulatory Commission and following the policy of “respecting the basic principles of the registration-based IPO system, learning from best international practices, and reflecting China’s characteristics and development stage,” the Shanghai Stock Exchange has been making steady progress on the STAR Market and the pilot registration-based IPO system, in a bid to build the market into a springboard to success for sci-tech innovation companies. As of the end of June 2021, the STAR Market lists 301 companies; cumulative IPO proceeds have amounted to 375.32 billion yuan and market value approximately 4.7 trillion yuan. The STAR Market is beginning to demonstrate its positive impact on technological innovation and the new economy in four ways. First, market inclusion. Many pre-revenue companies, red-chip companies, and companies with dual-class stock structure have successfully listed on the market. Second, industrial agglomeration. Most of the listed companies are in the high-tech and strategic emerging industries. Third, brand demonstration, as the market is increasingly attractive to leading companies. Fourth, corporate growth. Companies listed on the STAR Market have maintained a high compound growth rate in revenue.

During the 14th Five-Year Plan period, we will continue to strengthen the STAR Market and pilot registration-based IPO system, such that the market can further drive technological innovations and shape the future and make greater contributions to building Shanghai into an international financial center and technological innovation center.

First, we will ensure the STAR Market is more capable of supporting national strategies. Firmly committed to the market’s positioning, we will support and encourage the listing of “hard technology” companies and improve the institutional arrangement by which the market serves innovation-driven development, so that it can promote technological independence and self-reliance and the high-quality interaction of technology, capital, and the real economy.

Second, we will ensure only quality companies are admitted. We will duly enforce the requirements of the disclosure-centric IPO reform, hold issuers accountable for their conduct and intermediaries for their role as “gatekeepers,” and build synergy between the players involved to ensure only high-quality companies are listed.

Third, we will fully tap the STAR Market’s function as a testbed for reforms. We will accelerate institutional reforms in line with the characteristics of sci-tech innovation companies and continue to evaluate and optimize the foundational frameworks such as those for issuance, listing, information disclosure, trading, ongoing supervision, and delisting.

2. Boosting financial support for key industries and “five types of economy” (economy built on innovation, services, corporate headquarters, openness, and market vitality). We will support the creation of clusters of key industries, encourage financial institutions to develop innovative products and services, and expand the scale of medium- and long-term loans and unsecured loans, in order to provide high-quality financial support to key industries such as electronics and information, health, automobile, high-end equipment, and new materials; to strengthen both underdeveloped and developed manufacturing industries; and to modernize industries and supply chains. We will direct more financial resources into the five types of economy, to create a predominantly service economy that is powered by innovation, high concentration of headquarters, high volume of market activities, and deep integration with international markets. We will enable finance to play a greater role in infrastructure projects, including by advancing the pilot program for real estate infrastructure investment trust (REITs) to set an example for others and build Shanghai into an internationally competitive REITs market. We will support the construction of new infrastructures, such as next-generation networks, innovation infrastructures, artificial intelligence and other integrated infrastructures, and smart device infrastructures. We will support the “new urbanization” initiative and broaden the source of funding for urban construction. We will increase financial support for urban renovation projects and the five new urban areas, and steer more private capital into the “new urbanization” initiative.

3. Promoting inclusive finance. We will develop a diversified and wide-ranging system of financial inclusion organizations and urge commercial banks to continue to develop professional institutional systems for inclusive finance. We will improve government-backed financing guarantee and re-guarantee and the risk-sharing mechanism. We will support local financial organizations such as those that provide microloans, financing guarantees, or financial leasing, commercial factoring, pawning, and local asset management services to better serve MSMEs in their own ways. We will develop innovative, electronic inclusive products and services to make financial inclusion digital and more intelligent and targeted. We will leverage the one-stop service portal to foster big data-powered inclusive applications, promote the sharing of public data, and support banks to use technology to make their MSME services more efficient. We will promote innovations in supply chain finance; better regulate such products as loans secured by inventory, warehouse receipts, orders, and accounts receivable; and enhance the supply-chain bills platform to provide targeted services to MSMEs in all segments of the supply chain. To fully tap the functions of insurance in mega-city governance, we will develop catastrophe insurance, residential construction defect insurance, and liability insurance.

Box 2: Promoting Inclusive Finance

Adhering to inclusive philosophies in all its activities, Shanghai has been orienting the financial industry to support stability on the six fronts and security in the six areas, in particular by actively responding to the impact of COVID-19 and progressively enhancing services to MSMEs. First, Shanghai has sharpened its policies to increase credit support to MSMEs, as a higher volume of inclusive services is reaching a broader range of businesses at a lower price. Second, Shanghai has been driving service innovations to help MSMEs grow stronger. Specifically, it continues to build the big data inclusive finance application and has launched the novel financing model of “credit insurance + security + bank.” Third, Shanghai has strengthened collaboration between the financial sector and industries to match businesses with the financial services they need. During the 14th Five-Year Plan period, Shanghai will vigorously develop inclusive finance and increase its capacity to meet the diverse financial needs of the public and the real economy.

To achieve this goal, first, we will further enhance inclusive finance with digital technologies. We will launch the 2.0 version of the big data inclusive finance application, make a larger set of public data available, strengthen data fusion governance, and expand the scope of the pilot programs.

Second, we will improve the synergy between financial and fiscal policies. We will continue to implement credit risk compensation and incentives and leverage the guidance effect of government funding to encourage banks to offer more credit to MSMEs. We will improve the credit enhancement function of policy financing guarantee funds, the risk-sharing mechanism, and the multiplier effect of financing guarantee.

Third, we will promote innovations in supply chain finance. We will facilitate the development of well-regulated supply chain financial products, improve the efficiency of accounts receivable financing for MSMEs, and encourage key companies to complete accounts receivable confirmation through the service platform for accounts receivable financing. We will improve the supply-chain bills platform and encourage banks to offer more convenient discount and pledge financing services with respect to supply-chain bills.

Fourth, we will continuously improve the quality and effectiveness of inclusive services. Financial institutions will be encouraged to provide and extend the duration of loans to MSMEs in innovation, green, foreign trade, cultural and tourism, and sannong (agriculture, farmers, and rural areas) sectors to the maximum extent possible without compromising business sustainability, and to increase the amount of first-time loans, renewed loans, and unsecured loans.

4. Improving the financial service systems for elderly care and healthcare. We will strengthen the financial services for the elderly care and healthcare sectors by encouraging financial institutions to provide greater financing support—through a wide array of channels and forms such as bank loans, trust products, and financial leasing—to those sectors, and by supporting eligible elderly care and healthcare companies to raise capital through public listing and issuance of bonds and asset-backed securities. We will support fund management companies to expand the size of pension target funds and broaden the scope of investment permitted for individual commercial pension account. We will promote innovations in pension- and healthcare-related financial products, such as individual tax-deferred commercial pension insurance and long-term care insurance, foster commercial medical insurance, and advance the pilot program of allowing individuals to purchase commercial medical insurance products like “Huhuibao” through personal medical insurance accounts. We will back the Shanghai Insurance Exchange in building a health insurance trading platform. We will improve the system for investing in elderly care and healthcare and, to increase the variety of elderly care services, encourage insurers to help fund medical-nursing institutions for seniors. We will build an investment management system suitable for pension funds. We will encourage private investment in the elderly care and healthcare sectors.

5. Redoubling financial support for higher-quality, integrated development of the Yangtze River Delta region. We will enhance coordination between regional financial markets and raise the capacity of the Yangtze River Delta Capital Market Service Base to support the financing of local enterprises in the capital market. We will strengthen cooperation among equity markets, and between commodity futures and spot markets, in the region. We will promote financial cooperation and innovation and set up a zone for piloting fintech reforms in the region. In support of cross-regional financial services, we will promote inter-city linkage in payment settlement, credit guarantee, and credit management in the Yangtze River Delta region. We will strengthen coordinated regional financial regulation by further optimizing the cooperation mechanism between the local branches of the People’s Bank of China, China Banking and Insurance Regulatory Commission, and China Securities Regulatory Commission and local financial authorities. We will improve the round-table conference mechanism for directors of local financial authorities in the Yangtze River Delta. We will improve information exchange and regulatory coordination by establishing a joint risk prevention and control mechanism and a coordinated resolution framework for major cases. We will facilitate exchange among organizations in the financial industry and encourage greater cooperation between financial industry associations in the region.

6. Strengthening coordination between the international trade center and shipping center initiatives. We will promote trade and finance and encourage multinational corporations to set up treasury operation centers in Shanghai for businesses in the Asia-Pacific region and even around the globe. Cross-border payment and settlement will be made more convenient to facilitate offshore trade, entrepot trade, cross-border e-commerce, and other new types of international trade. We will help the Hongqiao Central Business District attract influential institutional investors, investment firms, and innovation companies, while accelerating the building of the Hongqiao international opening-up hub. To promote shipping finance, we will support financial institutions to offer credit financing, ship leasing, aircraft leasing, funds settlement, and other services in line with the characteristics of shipping companies. We will develop freight index futures and other derivatives to raise the global prominence of Shanghai freight rates. We will attract marine insurers to Shanghai to expand the range of marine insurance products on offer.

(II) Advancing financial reforms and innovation and enhancing financial markets, products, institutions, and infrastructures

We seek to actively align with the financial market reforms proposed by national financial authorities, raise the proportion of direct financing and equity financing in particular, encourage financial-product innovations, bolster the international influence of “Shanghai Prices,” improve the multi-layered system of financial institutions, and strengthen the current system of financial infrastructures.

7. Developing China’s multi-tiered capital market. Aligning with the financial market reforms proposed by national financial authorities, we will strengthen the STAR Market, advance the pilot registration-based IPO system, add market makers to the STAR Market, and create the conditions necessary for the introduction of the disclosure-centric registration-based IPO system across the whole securities market. We will establish an institutionalized delisting mechanism to improve the quality of listed companies. We will optimize the market-based bond issuance framework and steadily expand the bond market in both size and product mix. We will help the Shanghai Equity Exchange play its role as an integral component of the multi-tiered capital market to further the incubation of sci-tech innovation companies. We will attract well-known, specialized intermediaries and enhance intermediaries’ accountability and capacity to create a sound market ecosystem. We will welcome more types of institutional investors to the market and empower trusts and insurers to play a major role in the development and stability of the capital market. We will attract and foster long-term capital such as pension funds and corporate annuities. We will facilitate insurers to make lawful and compliant pre-IPO investments, increase investment in medium- and long-term corporate bonds, and encourage insurance investment in a wider range of assets.

8. Supporting innovations in a diversified financial market. We will support the China Foreign Exchange Trade System to help build the money and bond markets; steadily expand the interbank foreign exchange market; strengthen the interbank interest rate, foreign exchange, credit, and other derivatives markets; and make trading more convenient. We will support innovations in the commodity futures market, which encompasses supporting the Shanghai Futures Exchange’s Standard Warrant Trading Platform to offer services covering standard warrant, non-standard warrant, bonded warrant, and OTC derivatives and to try establishing a national registration center for exchange-based commodity warrants. We will further develop the International Board market of Shanghai Gold Exchange and make the local gold futures market more international to cement and raise Shanghai’s stature in the global gold market. We will leverage the Shanghai Insurance Exchange to build Shanghai into a world-class reinsurance center. We will help the Shanghai Commercial Paper Exchange to broaden the application of supply-chain bills, Bill Payment Express, and Discount Express to help commercial papers play a greater role in supply chain finance. We will support Shanghai Equity Exchange to build a full-featured trading platform for debt-to-equity swap assets. We will explore the establishment of a lawful and compliant private equity and venture equity transfer platform to foster the secondary market for such shares.

9. Raising Shanghai financial market’s global pricing power and influence. We will vigorously raise the pricing power of the Shanghai financial market by encouraging the extensive use of “Shanghai Prices”—such as those for gold, oil, copper, and rubber—in the international markets, so as to enhance China’s influence in the pricing of key commodities. We will optimize the formation mechanism for the Shanghai Key Yield (SKY) index for central government bonds, and establish an internationally significant RMB bond index suite. In coordination with the reform to transition to a more market-based exchange rate regime, and to improve the formation and transmission of market-based interest rates, we will optimize the formation mechanisms of CNY Central Parity Rate and improve and promote the use of Shibor, Loan Prime Rate (LPR), and CFETS Interbank Reference Offered Rate (CIROR). We will encourage overseas investors to reference Chinese indices and valuations by supporting them to use Chinese RMB bond indices as performance benchmarks and underlying of bond investment and encouraging them to use the valuation of authoritative institutions in China to measure the fair value of RMB bonds.

10. Encouraging innovations in financial products and instruments. We will pursue progressive improvements on stocks, bonds, and other fundamental financial products in line with the needs of high-quality economic development. We will fully tap the risk management functions of financial derivatives, try setting up a pilot program, on CFETS and other platforms, for the trading of RMB-based currency derivatives, and facilitate the development and listing of 30-year central government bond futures and equity index futures and options for representative markets. We will attempt to develop industry-focused ETF options and cross-border ETF options and promote innovations in cross-market ETF options. We will expand the list of commodity futures products, with a focus on the energy, chemical, and metals segments, and expand the markets of commodity futures and options, index, and other derivatives. We will enhance innovations in asset-backed securities to increase market liquidity and types of market participants. We will involve more banks, on a pilot basis, in the central government bond futures market and facilitate insurance investment in gold, crude oil, and other commodities traded on Shanghai-based exchanges.

11. Increasing diversity of financial institutions. Shanghai will attract high-profile financial institutions to set up local headquarters to increase the region’s influence and drive China’s high-quality economic development. Large domestic and foreign banks, securities firms, fund management companies, futures firms, and insurers will be encouraged to establish headquarters, functional head offices, and specialized subsidiaries and specially licensed business units in Shanghai. We will help financial institutions to become more competitive globally and foster world-class investment banks and asset management firms. We will both foster and attract competitive and compliant financial holdings companies, and promote the sound development of small-, medium-sized, and private financial institutions. We will become a leading region for the financial leasing industry by attracting top businesses to establish financial leasing companies and special-purpose vehicles in Shanghai. We will support the activities of the New Development Bank and Global Association of Central Counterparties (CCP 12) and attract more international financial organizations, representative offices of foreign central banks, international financial industry associations, and new multilateral financial organizations to Shanghai to promote international financial cooperation.

12. Enhancing financial infrastructures. We will facilitate the development of the Cross-border Interbank Payment System (CIPS) and the expansion of its feature set, and admit more institutions into the system. We will support the Shanghai Clearing House to offer Clearing Express, or RMB-dominated multi-currency clearing and settlement services for domestic and cross-border trades on eligible spot commodity service platforms. We will support China Central Depository & Clearing Shanghai Branch to cement its core platform functions including the cross-border issuance, cross-border settlement, and valuation of RMB bonds. Connectivity between Shanghai-based bond market infrastructures will be improved. We will also improve the securities depository and clearing systems and fundamental institutional frameworks, including bolstering the use of information technologies in the depository and clearing process. We will support China UnionPay to collaborate with major domestic and foreign clearing houses and payment service providers to facilitate cross-border payment. We will support the building of a national-level vault for exchange-traded precious metals. We will help create the integrated trust registration system and a mechanism for the transfer of beneficiary right under trust schemes.

(III) Pursuing high-level financial opening-up to strengthen the role in global resource allocation

We will implement the central government’s arrangements for supporting high-level reform and opening-up of the Pudong New Area, continuously reinforce the role of Shanghai as the gateway to China’s financial market, advance the pilot programs of restriction-free RMB use and capital account convertibility, develop RMB’s stature in offshore trading, cross-border trade settlement, and overseas financing, and improve the cross-border financial management framework.

13. Pioneering new opening-up measures in Shanghai FTZ and Lingang New Sub-Zone. We will roll out internationally oriented RMB financial products, expand the scope of domestic financial products open to overseas RMB investment, and promote the cross-border, two-way flow of RMB capital. Lingang New Sub-Zone will also pilot a high-level opening-up program for foreign exchange management. In the interest of serving the real economy and further liberalizing and facilitating trade and investment, financial markets and institutions will be supported to provide financial services for offshore economic and trade business and to develop offshore RMB trading while keeping the risks under control. As part of the initiative to develop the Lingang New Sub-Zone into an international data hub, we will launch a pilot program for the safe and orderly flow of financial data.

14. Cementing Shanghai’s capacity as a center for the allocation of RMB financial assets. We will act in concert with state financial regulators to further open the financial market, so that global investors may engage in cross-border investment and financing in Shanghai. Particularly, we will step up efforts to build an international financial asset trading platform; accelerate the across-the-board opening-up of China’s bond markets—including the interbank bond market and the exchange bond market—to further engage qualified foreign investors; open the futures market wider to offer more convenient risk hedging tools for foreign investors holding domestic RMB assets; issue more Panda bonds; support domestic issuers in issuing Yulan bonds directly at the international market; and promote global acceptance of RMB bonds as eligible collateral and build channels for cross-border mutual recognition of collaterals such as RMB bonds.

15. Expanding the demonstration effect of financial opening-up. We will encourage qualified foreign investors to establish or invest in securities firms, fund management companies, futures companies, life insurance companies, wealth management subsidiaries of commercial banks, insurance asset management companies, pension fund management companies, credit rating agencies, among others, in Shanghai. Foreign financial institutions will be supported to expand business scope and conduct business according to the same set of rules governing domestic institutions. We will encourage more foreign banks to become custodians for securities investment funds or underwriters in the interbank bond market, and support foreign institutions to apply for recognition as fund investment advisors.

16. Advancing the pilot programs of restriction-free RMB use and capital account convertibility. We will support the use of RMB for pricing and settlement in such areas as commodity trading, overseas project contracting, and cross-border e-commerce, to increase the share of RMB receipts and payments under current accounts and direct investment. We will make foreign exchange under current accounts more convenient to further expedite cross-border trade investment and financing; back the development of the Cross Border RMB Trade Finance Trading Platform; find viable models of capital account convertibility under the guidance of state financial regulators; and improve the multi-currency integrated bank settlement account system for more convenient cross-border funds management.

17. Improving global asset management capabilities. In the asset management industry, we will attract a diverse mix of market players from bank’s wealth management companies, insurance asset managers, and financial asset investment firms to their specialized subsidiaries, and welcome securities firms, fund management companies, trust companies, futures companies, and their specialized subsidiaries to settle in Shanghai. We will prioritize the growth of service providers such as those providing fund registration, valuation, fund evaluation, money brokerage, and consulting services; and look into the creation of dedicated custodians. We will bolster innovation in asset management products and services, promote the issuance of equity products, and create new fixed-income products. ETF products will be launched for CSI SH-HK-SZ Zhangjiang Innovation 50 Index; and development of Manager of Managers (MoM) and Fund of Funds (FoF) will be bolstered. We will expand the scope of the pilot program of fund investment advisory services and direct asset management firms to help manage basic pension insurance funds, corporate annuities, and occupational annuities. We will expand the pilot program of cross-border investment of private equity funds; encourage foreign institutions under the Qualified Foreign Limited Partner (QFLP) pilot to manage domestic RMB funds and encourage qualified domestic institutions to join the QFLP pilot; and support well-known overseas asset management firms and qualified domestic institutions to apply for joining the Qualified Domestic Limited Partner (QDLP) pilot.

Box 3: Accelerating the Building of a Global Asset Management Center Over the past few decades, Shanghai’s asset management industry has attracted 17 of the world’s top 20 asset managers, as the city now accounts for 30% of China’s insurance asset management and public fund market. Next, capitalizing on the opportunities from greater opening-up measures and fintech, Shanghai will focus on creating an ecosystem for the industry that builds on stronger rule of law, self-regulation, and government services, and gathers all core factors of production including institutions, products, markets, and professionals. We aspire to develop the city into a comprehensive and open asset management center with a high degree of resource concentration, a high level of globalization, and a relatively complete ecosystem, and an important asset management hub in Asia and one of the world’s top cities for asset management. First, we will create new asset management products and services to meet the diverse needs of investors, by introducing dedicated policies to support the pilot scheme for REITs, launching ETF products linked to the Zhangjiang indices, and fueling green finance. Second, we will leverage the role of the financial market in offering investment channels for asset managers. We will support more banks, insurance companies, and fund management companies to invest in exchange-traded bonds and central government bond futures, and prepare for allowing insurance funds to invest in gold, oil, and other commodities. Third, we will open the asset management industry wider to the world and help make its services more internationally aligned. We will build an international financial asset trading platform, and explore cross-border wealth management channels for local residents, attract internationally renowned asset management firms, and advance the QFLP and QDLP pilot programs. Fourth, we will build a favorable environment for attracting and training top asset management professionals. We will try launching pilot frameworks governing their market entry requirements and cross-border performance of duties, include them into the “three types of financial professionals” supported by the city, and develop a database containing a list of such professionals. Lastly, we will enhance comprehensive service capabilities and improve the industry environment by providing a sound legal and credit environment, setting up diversified dispute resolution mechanisms, and empowering self-regulatory organizations.

18. Enhancing financial cooperation under the Belt & Road Initiative. We will strengthen the equity and business cooperation between financial markets of the Belt & Road countries and regions, and promote cross-border connectivity of their financial infrastructures. We will support their governments, enterprises, and financial institutions to issue bonds and other financial products in Shanghai, and encourage those financial institutions to set up corporations or branch offices in the city. We will facilitate the New Development Bank to boost strategic cooperation in investment and financing with the Belt & Road countries and regions, and steer Chinese financial institutions to provide integrated cross-border financial services for enterprises that are “going global.” Taking the signing of the Regional Comprehensive Economic Partnership (RCEP) as a major opportunity, we will optimize cross-border payment and clearing and other financial services, support the cross-border use of RMB, and strengthen financial exchanges and cooperation with members of the RCEP.

19. Building Shanghai into an international reinsurance center. We will seek to develop an international reinsurance market of higher innovation, underwriting, and service capacity. We will help the Shanghai Insurance Exchange accelerate the establishment of inter-company data exchange standards and a digital reinsurance registration, clearing, and settlement platform that is rooted in Shanghai, provides services across the nation, and makes an impact around the world. We will develop the inward reinsurance business to enhance the Shanghai reinsurance market’s capacity to underwrite global risks. We will expand the types of reinsurers in Shanghai by attracting domestic insurance groups, insurance companies, and reinsurance companies to set up local reinsurance companies or functional institutions, allowing overseas reinsurance companies to establish local branch offices, and encouraging large companies to set up captive insurance companies.

20. Promoting exchanges and cooperation with other international financial centers as well as with the Hong Kong, Macao, and Taiwan regions. We will take an active part in global financial governance, improve the cooperation mechanism between Shanghai and other international financial centers, and enhance the financial complementarity, mutual support, and interaction between Shanghai and the regions of Hong Kong, Macao, and Taiwan. Shanghai will host more international financial conferences and build the Lujiazui Forum into one of the most influential, high-level financial forums in the world. We will encourage research institutes, colleges, and universities to engage more extensively with overseas financial research institutes to collaborate on financial research, talent training, and other projects.

(IV) Expediting the digital transformation of finance to boost the global competitiveness of Shanghai’s fintech industry

Shanghai will seek synergistic development of finance and technology through artificial intelligence, big data, cloud computing, blockchain, 5G, and other cutting-edge technologies. Shanghai will boost the application of fintech, attract fintech companies to the region, explore innovative regulatory models for fintech, and create a conducive environment for fintech.

21. Boosting the R&D and application of fintech. We will intensify the development of key financial technologies that could boost innovations in financial products, services, and regulation. We will promote the establishment of a national fintech research institute in Pudong. We will promote the application of fintech, including by advancing the central bank digital currency (CBDC) pilot program and facilitating the wider adoption of CBDC. We will also promote the application of fintech in financial market transactions, payment and settlement services, smart bank projects, intelligent investment management services, and insurance product innovation. The digital transformation for financial institutions will be sped up. We will support the creation of a set of “Shanghai Standards” for technological and business innovation, in order to contribute Shanghai’s wisdom to global fintech development.

22. Promoting the creation of a fintech hub. We will attract and cultivate world-leading fintech companies, support the People’s Bank of China to launch a fintech subsidiary in Shanghai, and propel qualified financial institutions and technology giants to establish fintech companies, fintech research centers, and open fintech innovation platforms in Shanghai. We will ensure industrial parks and industrial funds can play a leading role in this process, and encourage these parks or other platforms to develop differentiated policies to attract fintech companies, entrepreneurs, industry alliances and other institutions and market entities. We will support government guiding funds to channel more private capital toward fintech companies with strong technical capabilities, bright prospects, and compliant operations. We will facilitate the development of fintech industry organizations; support the Shanghai Fintech Industry Alliance and the Investment Technology League to play a key role throughout all segments of the industry; and promote the integration of production, learning, research, and application activities.

23. Exploring innovative regulatory models for fintech. We will pilot new regulatory models in an orderly manner to identify the more inclusive, prudent, and professional approaches for fintech regulation; conduct fintech innovation pilots in the capital market; and launch trials on improving payment and settlement oversight. Fintech regulation will be further coordinated between financial regulators in Shanghai and other localities, and corresponding communication channels will be expanded. We will increase the application of technology in regional regulation and foster permanent and institutionalized cooperation in the Yangtze River Delta region. We will also establish and improve fintech risk prevention mechanisms, drive innovations while ensuring compliance, better protect financial information, fully evaluate potential risks in integrating new technologies into existing businesses, and urge financial institutions to improve their risk prevention mechanisms.

24. Fostering a pro-fintech environment. We will promote the sharing and open access of data, drive data fusion and coordinated innovation across fields and industries while ensuring data safety and security, and expand fintech data resources in an orderly manner in accordance with the law. We will facilitate the creation of a fintech ecosystem that is conducive to innovation by encouraging financial institutions and technology companies to co-establish tight clusters of innovation centers, key laboratories, joint laboratories, and incubators. Global fintech summits will be held in Shanghai to enhance the city’s stature as a fintech center. We will foster and attract top fintech talent and offer greater support to fintech professionals.

Box 4: Building a Fintech Ecosystem Taking the opportunities provided by its international financial center and fintech center initiatives and by its digital makeover program, Shanghai will seek to vigorously promote the innovative integration of finance and technology and create a fintech ecosystem. First, we will optimize the strategic locations of Shanghai’s fintech industry. Most of Shanghai’s financial and technological resources are concentrated in a few key areas—the Lujiazui Financial City, the Zhangjiang Science City, the Lingang New Sub-Zone, as well as the belt linking the Yangpu Riverside, North Bund, the Bund, and Xuhui Riverside. We will capitalize on, and optimize the strategic geographic distribution of, these resources to create the industrial agglomeration effect where individual breakthroughs will come together and spark advancements across the industry. Second, we will attract high-profile fintech institutions. We will accelerate the preparatory works for fintech infrastructures, including a national fintech research institute, and cultivate a group of leading fintech companies with international influence to create a more diversified and healthy mix of fintech institutions in the city. Third, we will promote the integrated development of Shanghai’s fintech industry. We will support the Shanghai Fintech Industry Alliance, together with representative organizations from the various financial markets and the banking, insurance, and securities industries, to build a fintech laboratory to a cross-industry platform for fintech innovation and collaboration. We will also support the Investment Technology League to form a special committee on intelligent investment research to promote exchanges and coordinated innovation between industries. Lastly, we will build a supporting service system for Shanghai’s fintech industry. Shanghai will strengthen its exchanges and cooperation with domestic and overseas fintech centers, increase the global recognition of the Shanghai fintech industry, support the creation of fintech standards and open access of public data, and encourage intermediaries to provide high-quality financing matchmaking, credit rating, and legal advisory services to fintech companies.

 

(V) Promoting green finance to power low-carbon, sustainable development

Committed to green development, we will make an all-out effort to support China’s carbon peak and carbon neutrality goals. We will pursue innovations in green financial products, invigorate the green finance market, strengthen the supporting policies, and be the first to chart practical development roadmaps for green finance, by relying on Shanghai’s complete and open financial market and its deep pool of financial institutions and talent.

25. Leveraging market advantages to support green and low-carbon development. We will shore up financing support in areas related to energy conservation and environmental protection, clean production, clean energy, green transportation, and green buildings. In collaboration with national financial regulators and other authorities, we will support the IPO and follow-on offering of eligible green companies. We will also support eligible organizations to issue green bonds, the reduction of financing cost through specialized guarantee and credit enhancement mechanisms, improvements in the rules and regulations governing green bonds, and the credit rating of green bonds. Financial institutions will be encouraged to incorporate environmental, social, and governance (ESG) factors into product issuance and corporate listing, evaluation, and rating, and voluntarily disclose ESG information. We will support the creation of a national carbon trading market and try establishing a carbon finance market, in order to build Shanghai into a carbon pricing center with international influence.

26. Expanding the suite of green financial products. We will motivate commercial banks to vigorously develop green credit and will promote the securitization of green credit assets. We will increase the variety of green bond indices and green stock indices and encourage financial institutions to launch public and private equity funds and other green financial products linked to green indices. Private capital will be mobilized to set up market-oriented funds that invest in the energy conservation and environmental protection industries. We will develop green insurance and tap into the potentials of the premium adjustment mechanism. Innovative products such as green leasing and green trust will be supported. Explorations will be made in carbon finance products, including financial innovations such as carbon forward, carbon swap, carbon fund, and carbon leasing. We will help financial institutions optimize their business structure and increase their allocation to green financial assets, and encourage them to take an active part in the inclusive carbon reduction campaign, develop innovative products for inclusive carbon reduction, and set an example for green productive activities and green lifestyle.

27. Fostering specialized green-finance service providers. We will enable the National Green Development Fund (NGDF) to play a leading and demonstration role by focusing on key areas of green development, including environmental protection, pollution prevention, and energy and resource conservation and utilization, in the Yangtze River Economic Belt. We will encourage financial institutions to set up branches, business outlets, and business divisions that specialize in green finance, and to establish sound organizational structure, performance evaluation frameworks, incentives and constraints, and internal controls for the green finance business. We will keep up with the latest advances in green technologies worldwide, assess green projects and green technologies, and facilitate the tight integration of financial resources with green, low-carbon, and sustainable development. Institutions such as the New Development Bank will be supported to play an active role in international green finance cooperation.

28. Piloting climate investment and financing projects. We will back financial institutions in conducting climate investment and financing business and, for those businesses, in mobilizing private capital through various channels. We will encourage private capital and foreign capital to engage in climate investment and financing, support qualified climate-friendly companies to raise funds through the capital market, and seek to set up a climate investment and financing project database and a climate investment and financing fund for the Yangtze River Delta.

29. Fine-tuning the supporting policies for green finance. We will apply for the creation of a green finance reform and innovation pilot zone in Shanghai, and collaborate with national financial regulators to establish a standard system and to improve the performance assessment, evaluation, and other policies and measures for green finance. We will encourage financial institutions to try establishing standards and frameworks for evaluating green investments and to carry out environmental benefits assessment and follow-up green investment management. We will support the creation of green project databases and green financial information systems that offer support and services for financial institutions, related enterprises, certification and rating agencies, and financial regulators according to applicable laws and regulations.

Box 5: Actively Developing Green Finance Shanghai has been a forerunner in developing green financial products and innovative green financial businesses in recent years, helping create a multi-layered ecosystem of green financial organizations, a wide array of green financial products and services, and a market platform that enables multi-channel integration of green industry and finance as well as industrial transformation. First, the city has overseen increasing support for green investment and financing. The capital market has been bolstering its support for green industries, such as with respect to green finance through the STAR Market. A steady stream of innovations is seen in the mode of issuance and variety of green bonds, as many resulting products have been successfully launched. Second, key organizations are showing demonstration and leadership effect. The National Green Development Fund has chosen Shanghai as its place of establishment. While supporting the transfer and commercialization of green technologies, these organizations are promoting the close integration of financial resources with green, low-carbon, and sustainable development. Third, there is rising support for green industries. Commercial banks in Shanghai have boosted green credit supply; compulsory environmental liability insurance has been promoted among enterprises with high environmental risks. Building on its complete financial market, abundant experience in financial opening-up, and large concentration of financial institutions and professionals, Shanghai will next build a green financial hub that connects domestic and international markets and make an all-out effort to support China’s carbon peak and carbon neutrality goals. First, we will create an innovative standard system for green finance. We will work with national financial regulators to build this system, so as to direct financial resources toward carbon neutrality programs, and encourage enterprises and financial institutions to disclose ESG information. We will take an active part in the research and development of international standards for green finance and enhance international cooperation on green finance. Second, we will invigorate the green finance market. We will support eligible companies from green industries to seek public listing; encourage commercial banks to develop green credit and the financial market to develop green stock indices, green funds, and green bonds; and support the development of such financial products as green insurance and green trust. We will also support financial institutions and relevant enterprises to seek green financing in the international market, as part of our effort toward the orderly, two-way opening of China’s green finance market. Third, we will strengthen the supporting policies for green finance. In collaboration with national financial regulators, we will improve the policies and measures for assessing and evaluating green financial performance to encourage financial institutions to increase allocation to green assets, thereby helping create a green economy and society.

 

(VI) Innovating the talent development system and increase appeal to financial professionals

Following the talent development pattern, we seek to attract and train both leading and younger financial professionals, and drive a more advantageous financial talent system by innovating the talent development system, thus creating a more favorable environment for financial innovation and entrepreneurship.

30. Optimizing the measures for attracting financial talent. Upholding a market-oriented principle and capitalizing on the principal role of employers and the professional advantages of human resource intermediaries, we will establish a comprehensive, open financial talent introduction platform to facilitate Shanghai-based financial institutions in employing financial professionals. We will amplify the exemplary role of Shanghai’s financial talent development programs and the key role of its talent introduction policy. We will support the financial institutions to flexibly introduce and use high-end financial talent by means of part-time employment, consultancy, and cooperation.

31. Refining the talent evaluation system. Comprehensively considering the evaluations of the government, employers, industry associations and human resource agencies, we will achieve more rational, market-oriented evaluation of financial talent. We will optimize Shanghai’s financial talent selection mechanism, which highlights moral evaluation and the finance’s fundamental role of serving economic and social development. We will further tap the principal role of employers and industry associations in talent evaluation and encourage professional organizations to explore certification programs for financial proficiency in Shanghai.

32. Creating innovative talent development programs. We will strengthen political guidance to financial talent and encourage them to serve the motherland using financial expertise. We will further promote talent development of the financial talent internship or training bases in Shanghai. We will drive Shanghai-based universities and colleges to prepare for employers’ requirements for most-needed financial talent and encourage them to set up joint talent development programs with financial institutions. We will capitalize on the professional advantages of financial associations to organize talent trainings and exchange. We will promote two-way talent exchange between the financial institutions and the government organs, enterprises, and institutions in Shanghai through appointment and secondment. We will encourage financial talent to obtain international or domestic certificates for financial proficiency.

33. Improving the services and safeguards for financial talent. We will ensure Shanghai’s various talent policies are duly implemented in the finance sector. We will build a single web portal for looking up the municipal talent policies and for completing human resource-related processes, and a unique service code for each financial professional. We will further coordinate talent service resources at the municipal and district levels to provide eligible financial talent with household registration, residence, and other convenience services.

(VII) Building a risk management system appropriate for Shanghai’s greater financial openness and innovations to effectively prevent and resolve financial risks

We will enhance financial regulatory synergy; improve our ability to identify, alert, and handle financial risks; promote orderly risk mitigation in key areas; explore establishment of a financial risk prevention and control system appropriate for the building of Shanghai International Financial Center and delicacy management of megacity; and forestall regional systemic financial risk.

34. Consolidating Shanghai’s position as a center for financial risk management and stress testing. We will build a trade repository that covers the whole financial market to improve our monitoring and analysis of and maintain stability of the market. We will, in cooperation with national financial authorities, establish a sound linkage system for monitoring, early warning, and macro prudential assessment and coordination of cross-border flow of funds. We will intensify risk evaluation and stress testing on financial innovation to better manage financial risks. We will use more regulatory technologies and explore technology-driven or smart regulation backed by big data, artificial intelligence, and blockchain.

35. Improving financial risk prevention and resolution mechanisms. We will work more closely with national financial authorities and further strengthen the role of the local coordination mechanism (Shanghai) of the General Office of the State Council Financial Stability Development Committee and Shanghai’s joint conference system for financial stability and coordination. We will increase the synergy on financial risk prevention and resolution by updating rules on financial risk prevention, early warning, resolution and accountability, clarifying the owner responsibilities of financial institutions, territorial responsibilities of local governments and regulatory responsibilities of financial authorities, and adopting a “zero-tolerance” policy toward violations of laws and regulations.

36. Enhancing the monitoring and early warning of financial risks. We will revamp the system of financial risk monitoring indicators and strengthen prospective study and timely assessment of risks. Leveraging the AI-powered city governance and other platforms, we will conduct ex ante risk management and improve the coordinated mechanism for monitoring and early warning of financial risks. We will establish a local financial regulatory information platform that integrates information collection, industry statistics, risk monitoring and early warning, and other related functions, to enable a more law-based, specialized, and technology-driven financial regulation by local authorities.

37. Resolving financial risks in a rule of law-based and prudent manner. We will refine the contingency plan for financial emergencies to resolve financial risks in a rule of law-based and prudent manner. Taking appropriate measures based on the risk category, we will take market, judiciary, administrative, and industry self-regulatory measures to mitigate the risks. To prevent and crack down on illegal financial activities, we will establish a comprehensive governance system to tackle illegal fundraising, which features joint management, mass participation, performance of one’s own responsibilities, and concerted efforts. We will explore category-based regulation of local financial organizations so that the fittest will survive and risks will be resolved in prudent manner.

38. Bolstering industry self-regulatory organizations. We will enhance industry self-regulation and compliance management of the financial sector. We will explore and introduce internationally-recognized rules and practices to drive better member services of self-regulatory organizations. We will strengthen the publicity of self-regulation and raise the awareness of financial institutions and professionals for self-regulation and compliance. We will improve the functions of self-regulatory organizations across the financial sector and tap the active role of the Shanghai Financial Association and other financial associations in self-regulation, member service, complaint reporting, platform building, and development guidance.

39. Strengthening the protection of financial consumers. We will enhance the financial consumer protection system and advance the building of the diversified financial dispute resolution mechanism. We will continue to provide financial risk warning, propaganda and education and guide the consumers to develop the financial consumption principle of “caveat venditor and caveat emptor.” We will continue to regulate the financial marketing and advertising activities of all market participants. We will build normalized education bases for financial literacy, innovate education models for financial consumers, and develop more education tools adaptive to the digital age and demographic change.

(VIII) Creating a better financial and business environment and financial ecosystem

We will strengthen rule of law in the financial sector, enhance the social credit system, and optimize spatial planning for the financial sector, so that Shanghai will maintain its position of China’s most enabling financial and business environment and expedite its alignment with international practice.

40. Strengthening rule of law in financial sector. We will further leverage the role and model effect of Shanghai Financial Court and other judicial authorities and expand the application scope of their model judgments, so that the oral hearing of similar cases will be conducted in a more professional manner and gain greater credibility and influence internationally. We will explore adoption of more international financial arbitration rules in Shanghai International Economic and Trade Arbitration Commission and Shanghai Court of Financial Arbitration. We will pilot and implement the representative action system for securities disputes, national mediation system for securities and futures disputes, and other institutional innovations, to build a demonstration zone for a rule of law-based, credible financial market. Upon delegation of the Standing Committee of the National People’s Congress and considering the practical needs of Pudong’s reform and innovation, we will formulate regulations of Pudong New Area in line with the Constitution and basic principles under laws and administrative regulations, so as to explore legislation for Shanghai to align with high-standard international financial rule frameworks. We will support the work of the National Institute for Law and Finance. We will provide enhanced professional trainings to judiciary and law enforcement officers on financial knowledge to improve their performance of duties.

41. Enhancing the social credit system. We will leverage the Credit Reference Center of the People’s Bank of China (CCRC) and Shanghai Public Credit Information Platform to promote sharing of public credit information and financial information. We will cultivate internationally-competitive credit bureaus, commercial credit reporting companies, and credit rating agencies. We will assist CCRC in including in its system the financial lending information of companies and individuals domiciled in Yangtze River Delta Region. We will help eligible local financial organizations engaged in small loans, financing guarantee, financial leasing, and commercial factoring to connect with the CCRC.

42. Improving public services. With the help of the one-stop service portal, we will promote alignment of online and offline administrative services, integrate public data resources, and improve government service efficiency. To deepen the reforms to streamline administration and delegate power, improve regulation, and upgrade services, we will offer efficient convenience services to facilitate establishment and change registration of local financial organizations. We will do our part to support the national unified registration of security over movable property and rights to make financing more accessible and available to market participants.

43. Promoting the professional service industry. We will support compliant operation of professional service providers, including those providing accounting and audit, legal, asset evaluation, investment consulting, and information services. We will introduce in renowned international professional service providers to improve financial services. We will foster internationally-competitive financial information vendors to improve our information services. We will advance the building of the think tank system for Shanghai International Financial Center and raise its global influence.

44. Optimizing spatial planning for the financial sector. We will accelerate clustering of financial elements in Lujiazui-Bund-North Bund area to increase Shanghai’s service capacity. Specifically, we will cement and improve the position of Lujiazui financial district as the core functional district and foster its competitive edges in light of the development pattern of international financial center; support the northward, southward, and inland expansion of the “Bund financial belt” to raise its recognition and influence; and enhance the functions of North Bund to boost clustering of financial elements and resource allocation. We will promote the building of Dishui Lake Financial Hub to tap the role of the Lingang New Sub-Zone in coordinated development of onshore and offshore finance. We will encourage the Hongqiao International Hub for Opening-up to optimize trade and financial services. The districts and areas are encouraged to develop featured finance based on their respective location advantages and industrial foundation.

IV. Supporting Measures

(I) Leveraging the national-level coordination mechanism

Under the leadership of the CPC Central Committee and State Council, with the guidance and support of the State Council Financial Stability Development Committee and national financial authorities, we will advance the implementation of major pilots and projects for financial reforms and innovation and the building of Shanghai International Financial Center.

(II) Strengthening the Party’s leadership over financial programs

To boost the Party’s leadership over financial programs, we will strengthen Party building across the whole financial system; refine the mechanism for regular discussion on the building of Shanghai International Financial Center and other major strategic issues; raise the awareness of the role of finance in serving the real economy; and foster a team of high-quality financial cadres who advocate the Party leadership, practice fine style of work, and have excellent expertise.

(III) Improving the district-level implementation mechanism

Relying on the Shanghai Municipal Leading Group for Advancing the Building of Shanghai International Financial Center, we will create a stronger synergy of competent authorities at the municipal and district levels in building the financial center, and regularly convene work meetings of the leading group to drive implementation of the major programs set out in the 14th Five-Year Plan. We will follow up on the policy implementation and develop an information reporting system to allow regular report on the implementation progress and ensure satisfying results of work.