The China (Shanghai) Pilot Free Trade Zone. [Photo/IC]

The Financial Innovation Joint Laboratory of the China (Shanghai) Pilot Free Trade Zone (FTZ) launched the first batch of eight projects at the "Bank of Communications—Pudong New Area Free Trade Zone Innovation Business Promotion Conference" in Shanghai on May 14.

The projects involve  cross-border financial assets transfer, goods transaction of free trade accounts, aircraft financing of leasing companies, spot market cross-border transactions, cross-border financing for "going out" enterprises, and cross-border e-commerce.

The joint laboratory was unveiled by the Bank of Communications and the Pudong New Area Government at a signing ceremony for the comprehensive strategic cooperation between the two parties on April 29.

The laboratory will serve as a testing field for financial reform in the Shanghai FTZ. By integrating the resources of all parties, it will pilot financial innovation policies and accumulate the reform experience that can be replicated and promoted.

The two sides will further enhance the innovation capacity of financial services in the free trade zone, amplify the spillover effect, and promote the high-quality economic and social development of Shanghai.

The innovation projects launched by the laboratory focus on market demand, encourage real economy enterprises in their “going out” efforts of forming international ties, and support Belt and Road construction, which can be reproduced and promoted in the country.

At the promotion conference, the laboratory also issued certificates to hired experts including Lian Ping, chief economist at the Bank of Communications, and Shi Liya, director of the cross-border RMB business department at the Shanghai head office of the People's Bank of China. The experts will contribute to the innovative projects.

Shanghai is currently deepening its financial reform and innovation policies in the free trade zone by adding new areas. 

Li Jun, deputy head of the Shanghai Municipal Financial Work Bureau, revealed that the relevant departments are actively formulating financial opening up policies centering on investment and trade facilitation for the new areas of the Shanghai FTZ, so as to undertake financial reform and opening up on a larger scale and at a higher level.

The new areas of the Shanghai FTZ have explored special economic function zones with international influence and competitiveness. The areas have carried out reform and innovation by taking integrated circuits, biomedicine, aerospace, new materials, new energy, and other industrial chains as its carriers. These industries have a higher and deeper level of international division of labor and cooperation.

Financial services are not only needed for industrial transformation and upgrading, but also an inevitable requirement for financial development and innovation.

"Next, we will take the financial innovation of the new areas of the free trade zone as the guide to better promote Shanghai's construction as an international financial hub, better promote the high-quality integration of the Yangtze River Delta, and better serve the real economy," Li said .

Since the Shanghai FTZ was established in September 2013, it has made a number of achievements in six aspects, covering the institutional framework of financial reform and opening up, the expansion of free trade accounts, the internationalization of financial markets, the gathering of international financial institutions, the opening of the financial industry, and financial innovation.

Using the opening of the financial industry as an example, since last year, Shanghai has reported three batches of 31 financial industry opening up projects, of which 17 of them have been approved.

Financial institutions in Shanghai have also become the breeding ground of financial business innovation.

Xu Bin, president of the Bank of Communications' Shanghai Branch, said that as the only State-owned commercial bank headquartered in Shanghai, Bank of Communications has always accelerated the promotion of financial innovation in the free trade zone as an important strategic measure to support Shanghai's development into an international financial hub.

The bank has launched nearly 30 financial innovation businesses, of which 20 are first time businesses.