Shanghai FTZ to play leading global role

 

Shanghai Free Trade Zone is likely to become a major international treasury center and will attract an increasing number of multinationals amid the government's support for renminbi internationalization, Standard Chartered Group CEO Peter Sands said in Beijing on Tuesday.

Standard Chartered Group CEO Peter Sands

Along with Hong Kong, Taiwan, Singapore and London, the UK bank's CEO also sees the zone as the next opportunity to expand its renminbi services.

"We are very excited that the renminbi is becoming more integrated into the global economy and the process is extraordinarily rapid, although there are many steps to go through," he said.

Standard Chartered is preparing for the ongoing financial reforms and changes in China, especially for new policies in the Shanghai Free Trade Zone.

It will "play a positive role in the evolution", taking advantage of the bank's broad international business network and the experience of developing the bond market, according to Sands.

Standard Chartered Bank and Agricultural Bank of China signed a Memorandum of Understanding on Monday that cements a partnership to provide renminbi clearing services in the United Kingdom.

Cooperation with China's third-largest bank by total market value to build a renminbi clearing center in London will further help Chinese companies to expand business overseas and accelerate the currency internationalization, he said.

Under the agreement, financial institutions and companies can undertake transactions denominated by renminbi in banking services from the UK branches of the two banks.

"It will pave the way for greater awareness and the development of more renminbi related products and services in areas such as trade finance, global cash management, asset management and bond settlement based on the renminbi offshore market of London," said Sands.

"The opportunity to boost renminbi liquidity in London could be used to fund large investment projects and support the development of other financial activities."

With the settlement of the renminbi clearing services, the UK will provide more opportunities for Chinese enterprises to expand investments, he said. "More broadly, it will help Chinese companies access Western markets, including the United States and other European countries."

Negotiations on cooperation between Standard Chartered Bank and Agricultural Bank of China started three years ago. It also raised the agreement to continue to expand partnership of small- and medium-sized enterprises financing survives.

"We are proud to contribute to the strengthening of economic ties between the two nations, as the renminbi continues to internationalize," the UK bank's CEO said.

According to the Society for Worldwide Interbank Financial Telecommunications, London accounts for 28 percent of offshore yuan settlement transactions. It is the main offshore renminbi center in the European Union.

 

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