Speed Up The Global Layout And Help The "All In One" Industrial Bank To Build A Financing Artery.

Contributing author Julia Hongkong Report

Since 2013, the "one belt and one way" initiative has proposed that the "one belt and one road" construction has yielded fruitful results in the past six years.

By the end of March 2019, China has signed 173 cooperation agreements with 125 countries and 29 international organizations. From 2013 to 2018, the total import and export volume of goods trade between China and the countries along the border exceeded 6 trillion US dollars, and the direct investment of Chinese enterprises to the countries along the border exceeded US $90 billion, with an average annual growth rate of 5.2%. The business scope of RMB cross-border payment system has covered nearly 40 countries and regions along the line.

In this process, Xingye Bank, headquartered in the core area of the maritime Silk Road, Fujian Province, combined with its own advantages and business characteristics of collectivization management, innovated the service mode, differentiated financial services, and promoted the financing of "one belt and one road" construction.

As one of the five links of the "one belt and one road" initiative, financial intermediation is an important support for the construction of "one belt and one road". In recent years, Societe Generale has speeded up the construction of a global financial service system, exerting the advantages of comprehensive financial services, actively participating in the project construction along the belt, extending the service tentacles of green finance and investment banks, and providing comprehensive financing plan for "the domestic and overseas", "commercial banks and investment banks" for the construction of the projects along the line, so as to provide long-term funding support for the "one belt and one road".

Global one-stop solution

In recent years, with the accelerated pace of "going global", Chinese banks have accelerated the internationalization of network layout. At present, 11 Chinese banks have set up 71 first tier branches in 27 countries along the "one belt and one road" basis, covering almost all countries and regions closely related to China's economic and trade exchanges.

In accordance with the layout thought of "first close to the far, first developed and then developed", Xingye Bank has gradually promoted the layout of the Asia Pacific region. At present, it has formed a cross-border network service body of domestic branches, Hongkong branch, free trade area branch, and China Huoerguosi Kazakhstan cross border RMB innovation experimental center. On the other hand, it has established more than 1400 liquidation cooperation systems including 13 US dollar, euro, Canadian dollar and Hong Kong dollar in more than 1400 agencies in 104 countries and regions.

The infrastructure along the "one belt and one road" is weak and the demand for funds is huge. According to the estimates of the Asian Development Bank, investment demand for infrastructure in Asia will reach US $22 trillion and 600 billion in the next 2016-2030 years, with an annual average of US $1 trillion and 500 billion. In the 25 Asian developing countries, the average gap in their annual capital construction investment amounted to US $330 billion, accounting for 1.7% of their total GDP.

For commercial banks, the "one belt and one way" will bring important development opportunities. At the same time, under the current capital constraints, banks must be transformed from indirect financing to direct financing, making full use of multiple financing channels such as issuing bonds, trusts and financial management to enhance their comprehensive service capabilities. As a leading commercial bank group in China, Xingye Bank covers many fields such as banking, trust, leasing, fund, futures, consumer finance and so on. It can provide a one-stop comprehensive financial solution for enterprises and projects along the "one belt" along the line, online and offline, foreign currency, internal and external trade, offshore investment and financing.

Relying on the advantages of investment and integration in the bond business, Societe Generale has participated in the underwriting and investment of Yunnan dollar investment group's $600 million senior unsecured "one belt and one way" project specific bond, and actively assisted Yunnan to implement the national "one belt and one way" initiative and speed up the construction of Yunnan radiation center.

In recent years, Societe Generale has landed. The first National Bank supported the "maritime Silk Road" construction project sustainable medium-term notes, the first batch of "one belt and one way" debt supported by the first batch of the "one belt and one way" medium-term note, and participated in the "one belt and one Road" construction project as many as 481 projects, with a total loan of 53 billion 261 million yuan. The major projects on the ground include: Indonesia's coal-fired power purchase project, Xi'an Silk Road Conference Center and Convention and Exhibition Center's overseas debt issuance projects and supporting FICC business, the 8 Water Supply Bureau of Nigeria, the equipment procurement project of Zong Glu hydropower station, the cross border syndicated loan of Pakistan's main power country, the overseas merger and acquisition of panda debt of Singapore enterprises, and Kampuchea Siam airport construction project.

In twenty-first Century, business reporter recently learned that Xingye Bank has developed a more sophisticated cross-border financial product system in terms of traditional cross-border settlement and financing, capital transactions, global capital management, cross-border direct loan, cross-border syndicate, export buyer's credit, foreign debt issuance, panda debt and overseas RMB project loans. In 2018, the amount of cross-border settlement exceeded US $150 billion, and foreign bond issuance undertook 37 billion 300 million US dollars, ranking second in the same type of joint-stock banks.

The banking industry believes that to promote the "one belt and one road" project financing, we need to build a more open and inclusive "one belt and one way" financing platform. Commercial banks in the "one belt and one road" project financing, through domestic and foreign linkage mechanism, reduce financing costs, help enterprises get rid of the "financing difficulties, financing expensive" dilemma. By innovating financial services and professional support, we can flexibly use derivative financial instruments to effectively avoid interest rate and exchange rate risks.

Societe Generale Bank has underwritten and invested overseas bonds issued by the Xi'an Silk Road Conference Center and the Silk Road International Convention and Exhibition Center to issue 300 million US dollar bonds through the "overseas bond +FICC" product mix, and has continued to make money rate swap CCS.

In addition, the "one belt and one way" will become an important breakthrough for RMB internationalization. The data show that most of the countries along the belt and road are developing countries with more capital needs, and there is still much room for cross border payments. RMB accounts for only 14% of the total trade and investment in these countries and regions. Commercial banks can take this opportunity to improve the layout of capital, the circulation of foreign flows, storage and distribution, increase Renminbi demand and accelerate the process of RMB internationalization.

Equatorial banks promote greening investment

In 2016, President Xi Jinping put forward the idea of creating a "green silk road". Green development is not only the only way for China's economic transformation, but also the objective need for the sustainable development of the countries along the belt. Since the "one belt and one road" initiative was put forward, China has actively implemented the green "one belt and one way" construction and opened up a huge space for green investment and financing.

The Chinese Academy of Sciences has found that the growth patterns of these economies are relatively extensive, and the unit GDP energy consumption, log consumption, material consumption and carbon dioxide emissions are higher than the world average level by more than 50%. The unit GDP steel consumption, cement consumption, non-ferrous metal consumption, water consumption and ozone consumption substances are 2 times or more than the world average level. Many countries along the belt and road are facing the trend of environmental deterioration and natural resource cost rising to varying degrees.

Green is the background of "one belt and one road", and the promotion of "one belt and one road" investment greening is an important way to achieve the goal of "one belt and one road" for sustainable development.

Since 2018, the green finance Specialized Committee of the Chinese Financial Association and the financial city of London have jointly launched the "one belt and one way" green investment principle, which combines the low carbon and sustainable development issues into the "one belt and one road" initiative. In early 2019, Xingye Bank signed the "one belt and one way" green investment principle and became the first signatory.

In the second summit of the "one belt and one way" international cooperation, the "green belt development" international alliance and the "along the road" eco-friendly big data service platform jointly launched by the United Nations Environment Programme and the Ministry of ecology and environment of People's Republic of China will officially start. As the only banking financial institution, Xingye Bank has been invited to join the alliance to join hands with more than 120 global "join" partners to promote the consensus of green development along the "along the way" area, and promote the sustainable development of the country and region, and achieve the goal of sustainable development of the United Nations in 2030.

It is worth noting that in the construction of "one belt and one road" project, although China promises to comply with the legal norms of host country, there is a great difference in environmental protection policy and regulatory capacity among host countries. The risks caused by standard inconsistency can be solved by adopting generally accepted standards, such as the adoption of the "Equator Principle", a global financial industry guideline commonly adopted by international financial institutions in the field of environmental and social risk management.

As the first equatorial bank in China, Societe Generale has strictly implemented the equator principles of accreditation in China's overseas investment and trade projects, and identified, screened and supported more green projects to reduce environmental and social risks in the implementation of projects. More importantly, through the international equatorial tools and standards such as the equator principle, we will guide the investment and financing of "one belt and one road" at home and abroad to the green industry which is more friendly to the ecological environment. As of the end of March 2019, Societe Generale has carried out the applicability judgement of 1090 items, of which 418 applied the equator principle, involving 18169 billion yuan.

In order to match the source of funds needed for green projects along the belt, and actively identify, prevent and manage the corresponding risks, Xingye Bank actively collaborate with government departments and international organizations in the use of green credit, green trust, green lease, green bonds, green funds and other modes to support the development of "one belt and one road" green industry. At present, Societe Generale Bank's green finance financing balance accounts for nearly 50% of the total financing provided by non credit methods such as leasing, trust, fund and so on. In terms of financing tools, through green credit asset securitization and green financial bonds, we will broaden the funding channels for the "one belt and one way" green development.

In 2018, Societe Generale issued the first overseas green debt in Luxemburg, and issued second rounds of green financial bonds in China. As of the end of 2018, the amount of green financial debt reached 110 billion yuan in the country. It became the first Chinese commercial bank to complete the two banks' green financial bond issue overseas, and has become the largest commercial financial institution in the world.