(Yicai) Dec. 22 -- The 2024 China Offshore Financial Index recorded a slight uptick last year, as the growth model driven by scale expansion shifted to a phase of structural optimization and functional improvement.

The index rose 0.3 percent to 106.5 last year from 2023, according to a report initiated by the Shanghai Institute of International Economics, the Shanghai Financial Association, and the China Chief Economists Forum and compiled by the Offshore Finance Research Institute under the Shanghai Chief Economist Financial Development Center.

The core drivers of the index's stabilization are the advancement of institutional opening-up and structural adjustments in offshore finance. China's offshore finance has gradually broken free from its reliance on short-term scale expansion, placing greater emphasis on institutional stability, risk controllability, and functional coordination.

Moreover, the continuous optimization of its tax system and cross-border financial regulations in its pilot free trade zones has provided China with a more stable and predictable institutional environment for the development of offshore finance, serving as a crucial supporting factor for the index's stabilization and rebound.

The China Offshore Financial Index is an important barometer for measuring the depth of China's financial opening-up and international competitiveness, said Jing Jianguo, director of the Offshore Finance Institute under the SCEFDC.

Against the backdrop of a complex and volatile global financial environment and rising external uncertainties, the index’s slight rebound reflects the resilience and stability of China's offshore financial system, he noted.

China's scale of offshore bond issuance increased 3 percent in 2024 from the previous year, with the offshore trade settlement volume up 1.3 percent. The scale of cross-border Chinese yuan receipts surged 14 percent to over CNY35 trillion (USD5 trillion).

The comprehensive tax rate in China's pilot free trade zones further declined to 8.6 percent in the period. The proportion of traditional offshore deposit and loan businesses to the overall business structure declined moderately.

With the sustained growth in demand for cross-border trade, investment, financing, and capital management, offshore finance is gradually transforming into a multifunctional, integrated financial service system from a traditional model centered on deposits and loans.

Shanghai accounts for 47 percent of cross-border Chinese yuan receipts and payments, with a dual-engine pattern with Hong Kong gradually taking shape, Jing pointed out. This has injected strong momentum into Shanghai's endeavor to become a global yuan asset allocation hub and identified a core breakthrough for the city to enhance its global resource allocation capacity, he added.

Editor: Futura Costaglione