Qingdao, China is creating an international business environment
QINGDAO, China, Feb. 6, 2018 /PRNewswire/ — With the aim of creating an international business environment, the Qingdao Wealth Management Financial Comprehensive Reform Pilot Zone has continued to enhance its abilities to attract and deploy foreign capital since its inception, achieving historical breakthroughs in the quantity and quality of foreign capital being deployed. Foreign investment in actual use in Qingdao, a coastal metropolis in China’s Shandong province, amounted to US$7.73 billion in 2017, up 10 per cent from a year earlier and accounting for 45 per cent of the province’s total. Paid-in foreign investment reached 188.72 billion yuan (US$ 29.9 billion) for the year, up approximately 13.3 per cent year on year.
Several development banks have opened branches in Qingdao, creating a business environment that allowed the city to earn the status as a World Bank “golden city”
“Plant sycamore trees to attract phoenixes.” Over the last few years, Qingdao has been highly innovative in its deployment of foreign capital, optimizing the business environment, making full use of the policies that support the pilot zone and attracting foreign-invested financial institutions and equity investment firms including DBS Bank and ANZ Bank, while successfully bringing a series of large-scale projects on board. The city is now home to 18 foreign-invested banks, accounting for 75 per cent of similarly invested banks in the province. The city has also been named a “golden city” within the context of China’s investment environment by the World Bank.
ANZ China announced the opening of a branch in Qingdao in September of 2015, further expanding its banking business in the city and across the Bohai Gulf region. The branch represents the first commercial bank from Australia or New Zealand to put down roots in Qingdao after the city received the approval to establish the pilot zone. ANZ’s branch in Qingdao further expands the city’s foreign-invested bank network and offers more choices in banking products and services to companies.
When ANZ Bank president Mike Smith attended the opening ceremony for the branch, he said, “We are looking forward to enhancing our cooperation with governments of the City of Qingdao and the province of Shandong through the branch and continuing to support local economic development.”
Foreign-invested insurance companies establish joint-ventures in the city, bringing the entire local sector in line with international standards
Insurance companies, with ERGO China Life Insurance serving as an illustration, recognized the city’s excellent business and social environment. ERGO China Life Insurance is a national life insurance company jointly invested by Shandong State-owned Assets Investment Holdings Co., Ltd., Germany-based ERGO Group and ERGO Life. ERGO China Life Insurance’s division in Qingdao was formally put into operation on March 3, 2016. The branch has rolled out a new service model and several alternative and specialized insurance products, all of which has been welcomed by local businessmen and residents, while, at the same time, served as the driver behind the establishment of an insurance system related to the new products, promoting the development of the city’s economy.
Ge Bin, general manager of ERGO China Life Insurance’s Qingdao division, revealed that ERGO China Life Insurance has chosen to focus on the development of a business that stands for quality, backed by an innovative management model that relies on steady and gradual growth. As of the end of 2017, under guidance from headquarters that advocates a strategy that delivers deep penetration into any market into which it enters, the Qingdao division has opened 25 branches. The expansion effort has resulted in rapid growth, an annual doubling of insurance premium revenue and headcount and a year-over-year increase of 195 per cent in new policies being written.
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Qingdao, the economic center and regional financial center of Shandong province, has provided a solid foundation and ample headroom for growth across the life insurance sector, fortified by the healthy concentration of both financial institutions and manufacturers. The roll out of policies beneficial to the service sector by the municipal government provides strong backing for the ongoing development of the foreign-invested companies. In addition, Qingdao has a longstanding relationship with Germany the predates the establishment of the People’s Republic. The local populace has a high level of trust in the quality of products made in Germany, which, in turn, is now acting as a strong driver for and enhanced likelihood of success for the insurance companies that have chosen to enter the market.
Qingdao has several unique advantages that will help in its goal of establishing a thriving international business environment
The pilot zone has now attracted several professional wealth management firms that play a leading and exemplary role, including China’s first foreign-invested wealth management company and the third yuan-denominated international investment credit fund. A growing number of overseas financial institutions are opening branches in the zone, bringing the latest international wealth management models to China, while injecting new energy.
The superior business environment, high-quality commercial services and the favorable government policies have convinced many foreign firms to open a branch in Qingdao. To date, 34 foreign-invested financial institutions have opted to set up shop in the city, accounting for 90 per cent of the foreign-invested financial institutions in the province.
In 2017, Qingdao, home to the only wealth management-based comprehensive financial reform pilot zone in China, released an action plan including an optimized three-year cooperation model with the world’s top 500 companies and industry leaders, based on an enhancement of the opening up policy as well as new models for collaboration. As of the end of 2017, 264 projects, invested by 134 of the world’s top 500 companies, and 230 projects, invested by 140 of the top 500 domestic companies, were in progress towards completion.
While consistently optimizing the model for the strategy of the city’s trade and other forms of economic cooperation with the rest of the world, Qingdao has now signed economic partnerships with 75 cities, provinces, states and commercial institutions across the globe and established seven Qingdao Industry and Commerce Centers worldwide, including in the US, Germany and Japan, further expanding its international network.
The report from the 19th National Congress of the Communist Party of China calls for greatly relaxing control over market entry, deepening the opening up policy in the service industry, and protecting the legal interests of foreign companies. In 2018, Qingdao’s financial sector plans to shift its focus to innovation as the main driver to lead development, while continuing the build out of the wealth management pilot zone in tandem with the international wealth management center. At the same time, the financial sector has stated its commitment to three key tasks: serving the real economy, preventing and controlling financial risks and deepening financial reform, contributing to the establishment of Qingdao as a more vibrant and truly charismatic city.
SOURCE Qingdao News Center