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ICBC Fully Supports the Construction of the Third Batch of FTZs

The third batch of free trade zones (FTZs) was formally established on April 1, 2017. Prior to this, ICBC has taken the initiative to dock itself with the needs of the FTZs for financial service, set up branches and institutions and completed several initial businesses in local markets, which has boosted implementation of reform and innovation in the FTZ.

ICBC has launched innovative businesses including investment and financing, cross-border settlement, guarantees, and commodity clearing in the third batch of FTZs. For example, ICBC Shaanxi Branch took the lead in opening accounts available in RMB and foreign currencies for an overseas subsidiary to an enterprise in the local FTZ and process the first cross-border settlement business. The Branch also issued a foreign guarantee for a large overseas coal-fired power plant project executed by a major go-global enterprise in the FTZ. ICBC Zhejiang Branch actively issued the first batch of project loans for a number of commodity trading enterprises in the local FTZ. It also docked the Branch’s system with a petrochemical trading center and completed the first online fund clearing of commodity transaction in the FTZ. ICBC Chongqing Branch handled the first L/C settlement and trade financing for an enterprise in the local FTZ. ICBC Sichuan Branch issued the first import L/Cs for an enterprise engaged in parallel vehicle import and a supply-chain enterprise. ICBC Hubei Branch concluded the first cross-border settlement businesses in three regions under the jurisdiction of the local FTZ. ICBC Henan Branch issued the first overseas loan for an enterprise in the local FTZ. ICBC Liaoning Branch opened the first FTZ account for an overseas subsidiary of a well-known private enterprise in Liaoning Province and finished the first cross-border settlement business.

An official with ICBC said that as an important mechanism arrangement of China's financial reform and opening up, FTZs pioneers trade facilitation, RMB cross-border utilization, capital project reform, and the promotion of interest rate liberalization, creating an important opportunity for commercial banks to carry out relevant financial services and business innovation. To serve the construction of FTZs, ICBC is committed to building FTZs into an important platform for linking domestic/foreign customers, capital, products and markets, for business innovation and international exchange, and for serving the real economy.

First, ICBC has a full coverage of service network. ICBC has set up a complete service network in all pilot zones and embedded FTZ business into the global service network, enabling dynamic integration of policy advantages and ICBC’s global service capabilities to promote interaction between the FTZ and the global market. As at the end of 2016, ICBC has 412 branches and institutions in 42 countries and territories and indirectly covers 20 African countries through strategic shareholding in the Standard Bank of South Africa. Seven institutions in Singapore, Luxembourg, Canada, Qatar, Thailand, Argentina and Russia were designated by People's Bank of China as RMB clearing banks. Together with 1500-odd corresponding banks, ICBC strongly supports the development of FTZ business through a complete and industry-leading global service network.

Second, ICBC provides full-suite financial products. By focusing on financial needs for economic restructuring and upgrading under the new normal, ICBC has prioritized cross-border trade and investment and financing facilitation with highlight on the characteristics of FTZ reform and innovation It provides high quality and efficient financial services for infrastructure, key projects and key enterprises in the FTZs. In previous FTZs set up in Shanghai, Guangdong, Tianjin and Fujian, ICBC has established a financial product portfolio exclusive for settlement, investment, financing and transaction to meet the diversified needs of FTZ customers in treasury management, risk management, cross-border investment, financing and trade settlement. ICBC has completed the first two-way cross-border RMB funds pool and the first direct wealth management financing tool of Shanghai FTZ, issued the first cross-border loan in Guangdong Hengqin FTZ, the first cross-border RMB loans to Taiwan in Xiamen FTZ and many other businesses with significant market impact. In addition, ICBC has issued Panda Bonds and overseas bonds, and carried out cross-border e-commerce to provide convenient investment and financing services for global customers.

Third, ICBC has full coverage of customer group. With consistent innovation policies in the FTZ, its unique strength in linking domestic and foreign markets and expertise with the international rules have attracted a large number of enterprises around the world to enter or operate through the FTZ. Financial and factor platforms and cross-border e-commerce platform have become new sources of customers in the FTZ. Based on the FTZ policy and various needs of different customers, ICBC has customized all kinds of exclusive financial products and provided financial services for all customer groups. For instance, ICBC Shanghai Branch opened nearly 20,000 free trade accounts, covering all free trade account types. The balance of deposits and loans in local and foreign currencies amounted to RMB 40 billion and RMB 100 billion respectively under the sub-account accounting of the FTZ. ICBC Nansha Branch provided cross-border financial services to 21 cross-border e-commerce merchants. ICBC Hengqin Branch has become the largest financial innovation platform in Hengqin FTZ, establishing business relations with customers from nearly 30 countries around the world.