Chinlink-backed Financial Forum to Power Xi’an’s Growth
Xi’an, the eastern starting point of the ancient Silk Road trading route, has long lagged behind China's coastal metropolises due to its inland location.
But as the capital city of China’s northwest province of Shaanxi is trying to build itself into an emerging economic powerhouse by tapping into opportunities presented by the massive Belt and Road Initiative, it faces another challenge: the lack of massive funding needed for the city’s drive to positioning itself as China's largest inland port and logistics center and developing itself into a hard and core tech hub.
This is where Chinlink International Holdings Ltd, a Xi’an-based and Hong Kong-listed financial service firm, steps in, hoping the Shaanxi-HK Financial Cooperation Forum it helps organize can contribute to Xi’an’s ambitious endeavor by bringing financial resources and expertise to the city and help it tap the international capital market through Hong Kong, one of the world’s leading financial hubs.
Inaugurated in 2017, the Shaanxi-Hong Kong Financial Cooperation Forum is a platform organized by the Department of Commerce of the Shaanxi Provincial Government and undertaken by Chinlink where government officials, representatives from Hong Kong and overseas financial institutions, local entrepreneurs are brought together to explore business are opportunities.The platform “will help introduce advanced and mature international capital market knowledge to China, thus connecting Shaanxi new technologies with global capital,” Xue Jiangxing, Deputy Secretary-General of the People’s Government of Shaanxi Province, said in his opening remarks at the 2nd Shaanxi-Hong Kong Financial Cooperation Forum, which was held on June 12 in Xi’an under the theme of Boosting Technology and Capital in Shaanxi”. “The Forum would continue to provide a diversified exchange platform in bridging local enterprises with international capital in the future.”
The annual forum, which attracted more than 150 local companies from the new economy and biotechnology sectors this year, has already produced tangible results, facilitating the implementation of the Belt and Road Initiative projects in Xi’an and Shaanxi as a whole, according to Li Shengrong, deputy director of the Department of Commerce of the Shaanxi Provincial Government.
As a result of last year’s forum, overseas bond issuance by local government and companies has increased significantly, injecting funds into the local economy and Belt and Road Initiative-related projects, Li said, citing the example of US-dollar bond issuance by Xixian New Area.
Thanks to the expertise and business opportunities the forum provided, Shaanxi has also set up several home-grown financial holdings company to help its local financing needs, the deputy director said.
The forum is not only benefiting Shaanxi and Xi’an alone, it also serves Hong Kong’s interests, its financial industry in particular, according to Li Weibin, chairman and managing director of Chinlink, which is principally engaged in providing financing solutions in the province through financing guarantees, supply chain finance and finance leasing to small and medium-sized enterprises(SME).
“The forum is a win-win platform through which Xi’an and Shaanxi can tap into the financial expertise and international capital market access Hong Kong boasts while Hong Kong financial industry can explore the business opportunities from the Belt and Road Initiative and the Shaanxi Free Trade Zone,” said Li.
The forum provides opportunities for more local companies to learn the financial market, listing rules and other financial developments in Hong Kong, broadening their financing or investment channels, or even seeking listing in Hong Kong. Such knowledge gained can help them plan their development roadmap from a global perspective, Li said.
This year’s forum, for example, features Franky Chung, Senior Vice President, Issuer Services, Hong Kong Exchanges and Clearing Limited, who made a presentation on new listing reforms in Hong Kong regarding the tech companies. Experts from leading legal and accounting firms specialized in corporate finance, executives from international financial institutions and technology companies were also present.
Shaanxi is aiming to have 100 companies listed overseas in 10 years, majority of which will be listed in Hong Kong, Li, the deputy head of the commerce department said. The Shaanxi-Hong Kong Financial Cooperation Forum, Li said, therefore can play an instrumental role in helping facilitate such overseas listing push.
The forum also serves as a bridge through which international investors are getting to know Xi’an and Shaanxi, already an engineering and hard technology center in China, help connecting global capital to the technology.
The forum is helping raise the profile among international investors of what Xi’an and Shaanxi can offer, putting them on the radar of international investors and helping local firms to access global capital and expertise, said Christian Dargnat, former Chief Executive Officer of BNP Paribas Asset Management and now advisor to the Board of MCM Partners, a Hong Kong-based financial services boutique that has licenses to deal in securities, future contracts, advertising in securities and asset management business.
As Xi’an strives to build itself into a “hard and core tech hub, many tech startups have sprung up, which is another area that Hong Kong can help, according to Li, the chairman of Chinlink.
In addition to the financial services and solutions from Hong Kong, the forum in the future can also develop into a bigger platform through which innovative technology startups in Shaanxi and Hong Kong meet and seek partnerships, Li of the Chinlink said.
Another area that the forum is playing a bigger role is the financial industry development in the China (Shaanxi) Pilot Free Trade Zone, which was officially launched in April, 2017.
The Shaanxi provincial government will expand the financial industry opening up in the free trade zone and relax restrictions on foreign investment in banking, securities and insurance sectors, Li, the deputy head of the commerce department said.
As one of the world’s leading free ports, Hong Kong has tremendous expertise and experience in trade finance and other related financial expertise, which could be of great value to Shaanxi Free Trade Zone.
In addition to the opportunities to exchange views with provincial and city government officials, Chinlink also organized field trip to Fengdong New City of Xixian New Area and Xi'an Casstar Technology Incubator Co., Ltd as a way for the participants to gain a deeper understanding of latest economic development in Xi’an.
Chinlink said it will develop the Shaanxi-Hong Kong Financial Cooperation Forum into a long-term sustainable platform and plan more sub-forums or different themed-workshops that are revolving around the forum, according to its chairman Li.
Chinlink is planning to set aside an 800 square meters of office space in Xi’an as a permanent meeting venue devoted to the Shaanxi-Hong Kong financial cooperation initiatives as part of the company’s efforts to boost local firms’ access to international capital market, the chairman said. The venue, which will be housed at Chinlink International Centre in Xi’an, is scheduled to be opened in the second half of this year, according to Li.