(Yicai Global) Dec. 24 -- China will deepen the links between the domestic and overseas financial markets in the Chengdu-Chongqing Region and support non-financial Singaporean and Japanese firms to conduct equity and debt financing there, according to a blueprint posted on the website of the People’s Bank of China today.

Plan for Chengdu-Chongqing Co-construction of Western Financial Center was jointly issued by the central bank, the China Securities Regulatory Commission, the China Banking and Insurance Regulatory Commission and five other bodies.

The plan proposes to support Chengdu to steadily promote the digital yuan pilot, carry out e-yuan research and mobile payment innovation uses, and expand the application scenarios of the digital yuan.

The blueprint also seeks to support the construction of a national fintech certification center in Chongqing. In addition, a China-Singapore fintech cooperation demonstration area will be set up to implement national trials for fintech applications and standardized financial application.

Chengdu, the capital of Sichuan province, and Chongqing, a municipality directly under the central government, are two hubs in west China.

Under the framework of the China-Singapore connectivity demonstration project and the China-Japan demonstration zones, the plan will study the establishment of a fund connectivity mechanism to carry out two-way investment and financing with Singapore and Japan, before gradually expanding to countries involved in China’s Belt and Road Initiative.

Also, cooperation between the Chengdu-Chongqing Region, Singapore and Japan on bonds, funds, wealth management and bills will be explored. The financing and roadshow platforms in the two cities will be encouraged to connect with Singapore Exchange and Hong Kong Exchanges and Clearing to share cross-border investment and financing information.

Development Targets

The scheme proposes that by 2025, a western financial center will be initially completed in the Chengdu-Chongqing Region along with the basic establishment of a highland for fintech development in the west of the country.

By 2035, the region’s status as the financial hub of western China should be more consolidated to form an inland financial opening-up services body that supports regional industrial development and leads national high-quality development, with a significant increase in its international influence.

To achieve these targets, apart from deepening the interconnection of onshore and offshore financial markets, the Shanghai and Shenzhen bourses and the New Third Board will be encouraged to build a comprehensive services window for the region’s central and western areas.

Besides, joint construction of an interbank bond issuance guidance platform in the region will be explored to provide funding services to BRI countries, China-Europe Railway Express, as well as firms and projects related to the new western land-sea corridor.

E-Yuan Expansion

The plan also proposes to advance trials of private fund management model innovation, and give priority to supporting the construction of a private equity investment fund service platform in western China when conditions are ripe.

In addition, the plan calls for steadily promoting the cross-border use of the yuan while encouraging the Chengdu-Chongqing Region to use the Chinese currency for pricing and settlement in trade cooperation with BRI participants.

Regional banking financial institutions are encouraged to issue yuan-denominated loans to eligible overseas firms and projects, according to existing policies, and cooperate with domestic and foreign financial institutions to develop and launch yuan-denominated financial products for the international market as per the law.

Editor: Peter Thomas