Leading financial institutions are competing for footholds in the Xiongan New District, an urban area which is set to be three times the size of New York City.
Since the announcement of the establishment of the Xiongan New District just over a week ago, two financial institutions – China Construction Bank and Jiuzhou Securities already taking concerned measures to expedite the establishment of local branches.
At a recent party and special work meeting convened by CCB, the big four lender indicated that establishing a presence in the Xiongan New District was a “current key political mission,” as well as called for “active innovation of products and services to satisfy the establishment of the new district.”
CCB said that it had created a leadership team headed by bank chairman Wang Zuji and vice-heads Zhang Gengsheng and Yu Jingpo, with a view to establishing a branch bank in Xiongan New Distrct as soon as possible.
Analysts note that it’s imperative for the big state-owned lenders to establish a presence in China’s new district and free trade zones, not only because they are beholden to political imperatives, but also because of the opportunities that it gives them to upgrade and innovate their services.
Operations in China’s free trade zones, for example, has given the state-owned lenders greater exposure to the latest international banking practices, such as cross-border RMB usage, interest rate marketisation, “panda” bonds, and cross-border e-commerce platforms.
The Agricultural Bank of China, for example, is the leader in free trade zone lending, with a total of 6787 free trade zone accounts as of the end of March, and a free trade loan balance of 63.5 billion yuan for growth of 5.07 billion yuan since the start of the year.
In addition to the big state-owned lenders, commercial lenders are also vying for a piece of the pie of northern China’s latest mega-city.
Speaking to China Securities News a Ping An Bank executive said that the lender had its eye on supervisory and regulatory policies for the Xiongan New District, and intended to establish a branch as soon as possible.
“No financial institution wants to miss its seat at this historic opportunity,” the Ping An executive said.