The implementation of the Regional Comprehensive Economic Partnership will strengthen financial ties among potential RCEP members and stimulate financial innovation, industry insiders said at a parallel session of the fourth Hongqiao International Economic Forum on Nov 5.
Chen Yulu, deputy governor of the People's Bank of China, said via a video link that China will make more commitments of further opening-up its financial market by advancing the negative list mechanism.
China's financial opening-up should be carried out under higher standards after the RCEP takes effect. Supervisory policies ought to be further optimized and more measurements should be arranged to provide a better environment for foreign companies to set up businesses in China, Chen said.
While financial opening-up should be further advanced, China's regulators should improve their capabilities regarding financial management and risk control in order to make supervision more professional and effective, he added.
The RCEP, signed by all 10 member countries of the Association of Southeast Asian Nations and five more Asia-Pacific region countries including China, will take effect from Jan 1, 2022. It is the world's largest free trade agreement, covering one-third of the world's population and accounting for 30 percent of global GDP.
Benjamin E. Diokno, governor of the Philippines' central bank Bangko Sentral ng Pilipinas, said that financial ties between Asian economies have already been tightened in terms of supporting the use of local currencies, digitalization, payment connectivity, financial stability and free trade.
Chea Chanto, governor of the National Bank of Cambodia, agreed that benefits can already be seen after submitting the RCEP ratification. The renminbi and other local currencies of ASEAN economies have played increasingly important roles in terms of cross-border trade, investment as well as other economic and financial activities.
Liu Jin, vice-chairman and president of Bank of China, said that the RCEP will usher in new opportunities for financial institutions by bringing more market access. Trade barriers will be further removed, and companies will be able to make outbound investment more easily and optimize their global mapping. All these will be translated into more business opportunities for financial institutions.
Financial institutions should come up with more innovations such as providing solutions throughout the entire value chain for different industries. They should also provide more efficient cross-border settlement, financing and transfer services to cater to the needs of cross-border e-commerce. The offshore renminbi market should be nurtured to lower losses in transfers so that companies can operate more conveniently in different markets, Liu said.
More industrial and supply chains will be deeply rooted after the RCEP takes effect, facilitating trade via the use of multilateral and bilateral currencies, said Peter Foo Moo Tan, president and CEO of United Overseas Bank (China)Ltd.
Shanghai as a global financial center should attract more multinational companies' regional headquarters to settle exchange rates, interest rates and other financial risks in the city, he said.