(Yicai Global) July 20 -- Petrochemical giant Sinopec Group has founded an investment arm in Xiongan New Area, adding one more colossus to the list of firms with a home in the economic zone proposed by Chinese President Xi Jinping.
Sinopec Capital held its opening ceremony in Xiongan on July 18, making it the first state-owned investment company in the region. The firm has registered capital of CNY10 billion (USD148 million) and specializes in new energy, new materials, environmental protection and smart manufacturing.
As well as making direct investments, Sinopec Capital will set up funds for science and technology, mixed-ownership reforms and emerging industries, an executive at the firm told Yicai Global. It will also introduce social capital to non-core businesses to improve asset quality and operating efficiency, he added.
The new firm will join a string China’s four largest commercial lenders and a string of policy banks, including China Development Bank, the Export-Import Bank of China and the Agricultural Development Bank of China, which have all penned deals with the provincial government of Hebei, where Xiongan is based, to offer financial support for local development.
Outside of traditional finance, Alibaba’s fintech affiliate Ant Financial has also established a base in the region, and partnered the local government to use blockchain for property rentals in the area. It will also help out with urban infrastructure, the environment and city operations and management.
Finance is set to become a pillar sector in Xiongan and obtain special policy support. There will be pilot reforms for the financial system, its products and business models in the region as it looks to turn into a global fintech innovation hub, said Wu Haijun, deputy director of the area’s management committee.
The central government turned Xiongan into a special economic zone in April last year as it looked to disperse Beijing’s non-capital functions to optimize city layouts in the Beijing-Tianjin-Hebei region, and make innovation a key driving force behind urban development. Its formation comes behind that of Pudong New Area in Shanghai and the Shenzhen Special Economic Zone in the southern province of Guangdong.