Building a high-energy financial service platform in the Shanghai Free Trade Zone, China Merchants Bank Shanghai Branch firmly focuses on the strategy of the free trade zone

In a flash of ten years, the sea and fields have changed.

In September 2013, China's first pilot free trade zone, the China Pilot Free Trade Zone, was established. China's journey of reform and opening up has entered a brand new stage.

At this time, China Merchants Bank Shanghai Pilot Free Trade Zone Branch was simultaneously listed and established. This is the only joint-stock commercial bank approved by the former China Banking Regulatory Commission to successfully enter the free trade zone from another location and enter Shanghai. It is also one of the first seven commercial banks to pass the acceptance of the Shanghai branch accounting unit of the People's Bank of China.

For the past decade, China Merchants Bank Shanghai Branch has stood at the peak of the wave, moving in line with China's free trade zone strategy. The Shanghai branch fully utilizes the innovation of the financial reform system in the free trade zone, relies on the global layout of CMB's onshore, offshore, free trade, and overseas branches, vigorously promotes the development of free trade financial business, and continuously explores financial reform and innovation.

Through deep participation in the construction of the free trade zone, China Merchants Bank Shanghai Branch provides comprehensive financial services for cross-border operations of domestic and foreign customers throughout the entire cycle, including FT cross-border asset transfer, leading cross-border syndicates, secondary forfaiting, CCS, fully functional fund pools, overseas bond forwards, Yangtze River Delta region FT linked loans, FTU interbank loans, FT cross-border bills, etc., continuously adding momentum and injecting vitality to the implementation of the free trade zone strategy and the construction of the Shanghai International Financial Center.

Ten years of hard work is also exploring a high-quality development path for financial institutions with Chinese characteristics, as well as a path to continuously enhance global influence and competitiveness.

Frontline ice breaking

In 2013, it was the first cross-border two-way RMB fund pooling business;

In 2014, the private equity investment fund of the Free Trade Zone made its first overseas investment;

In 2015, the first financial market business was conducted within the FTU accounting unit;

In 2016, the policy of separate accounting units in the free trade zone was successfully implemented;

In 2017, the first FT Free Trade Zone blockchain cross-border payment business was launched throughout the bank;

In 2019, the first free trade zone currency swap business was launched;

In 2021, the first FT cross-border bill business in China

One by one, the "first" and "first" orders have linked the ten-year trajectory of China Merchants Bank Shanghai Branch and its counterparts in the Shanghai Free Trade Zone.

Seizing the opportunity of institutional innovation in the free trade zone, boldly trying, daring to break through, and making independent changes - if we carefully review, behind every "first" is a crucial step in financial reform. Behind each step, it means "starting from scratch", facing various unknown challenges, and even breaking into "no man's land".

The pilot free trade account in the Shanghai Free Trade Zone is the best observation window.

In June 2014, China Merchants Bank Shanghai Branch officially passed the acceptance of the People's Bank of China's FT accounting unit and became one of the first seven banks to obtain the qualification to start FT business. Led by the head office, the Shanghai branch is responsible for policy interpretation, business promotion, system and institutional management, and provides FT account system services to customers through the Shanghai Free Trade Zone.

Compared to traditional accounts, FT accounts have more comprehensive functions, facilitate enterprise settlement, facilitate overseas financing, and offer a wider range of derivative financial products. But at the same time, it means that financial institutions will face a lot of new challenges.

For example, the business of the free trade accounting unit is a comprehensive banking business, and opening a bank requires rebuilding a "small bank" within the free trade unit and building a complete FT system and system.

In the early days, the FT system was not yet perfect, and incoming and outgoing accounts had to be processed using a universal accounting method. There were a large number of regulatory messages that needed to be manually recorded every day; The system does not support opening fixed deposits and margin, which affects the development of cash pledge credit business; The initial lack of institutional management and internal control compliance support in free trade business, with no precedent to follow in business rules, and no case reference during the first business operation

The free trade personnel of China Merchants Bank know that reform and innovation, leading by example, mean daring to venture into unmanned areas, daring to break through ice, and being good at breaking through.

Innovation, innovation, innovation! Faced with a new mission, the head office and branches of China Merchants Bank are working together to solve problems one by one.

After years of exploration, China Merchants Bank Shanghai Branch has completed the development and optimization of basic systems such as FT deposit project iteration, FT cross-border direct remittance transformation, FT foreign exchange fund trading system transformation, and FT international balance of payments declaration with the support of the head office; The renovation project of the FTU foreign currency clearing path has been completed, providing customers with more options and convenience for clearing account banks when processing foreign currency remittances; Complete the transformation of the FTU intra bank position monitoring module to achieve real-time monitoring of FTU foreign currency remittance positions and improve the accuracy of FTU position management; By leveraging the blockchain technology of the head office, cross-border payments through FT free trade account blockchain have been achieved, greatly improving the speed of cross-border remittances; Complete the optimization of FT online banking functions and provide online services such as deposit, loan, remittance, and pooling for FTE/FTN customers.

The exploration that started from here has also been continuously pushed nationwide - in June 2019, the pilot expansion of FT account reform was replicated in Haikou, Tianjin, and Guangdong regions. After a comprehensive evaluation, the head office of China Merchants Bank decided to establish an FTU headquarters, connecting FTU Shanghai, FTU Tianjin, and FTU Haikou branches to the FTU headquarters, successfully launching the first "FTU total score" model, forming a "north, central, and south" layout.

Refine internal skills

Reform and innovation aim to continuously enhance core competitiveness. In the process of overcoming difficulties and solving problems time and time again, a financial institution is achieving its own growth and transformation.

System construction has always been a key focus.

In order to establish a separate accounting unit system for FT free trade, the head office of China Merchants Bank actively responded to the demands of the branches and led more than ten departments of the head office to form a working group for free trade, starting from the basic deposit system and gradually improving the types of products under FT; Starting from the transformation of non resident FTN accounts, gradually improving the adaptability of the business system to FT accounts; And sort out the list of FT account systems, clarify the division of responsibilities, and improve the construction of FT account internal systems.

With the continuous enrichment of the types of deposit, loan, and exchange landing businesses, the CMB team has studied excellent cases, summarized the policy advantages of FT accounts, combined with the advantages of cross-border finance, cash management, and investment banking products, and launched the "Free Trade Connect" comprehensive service plan. The plan includes six sub plans: two-way settlement, two-way exchange, two-way pool, two-way loan, two-way bond, and two-way investment, covering various business needs of enterprises such as cross-border two-way settlement, exchange, loans, internal fund financing, bond issuance, and investment; And according to the updates of free trade policies and changes in customer demand, dynamic adjustments have been made to provide a comprehensive tool library for branch marketing of free trade customers.

These efforts have truly replaced physical fences with electronic ones, achieving "first line relaxation and second line control". Under the premise of controllable risks, by leveraging FT accounts to connect two markets and connect two resources, the service capabilities of domestic financial institutions can be extended, better supporting cross-border business of domestic enterprises and overseas layout of "going global" enterprises.

Benchmarking the world has always been a conscious pursuit.

In innovative financial fields such as free trade zones and FT accounts, China Merchants Bank has always maintained compliance with international standards and applied best practices to product design and service processes. As a result, enterprises can enjoy financial services that meet international standards, are of high quality, and are competitive.

Over the past decade, the FT account dividends of the Shanghai branch have gradually become familiar to customers, and related cases have rapidly spread in the industry, bringing two markets, two resources, and a convenient and innovative account system to "introduced" and "going out" enterprises. At the same time, by leveraging the advantages of cross-border E-recruitment and other series of products, combined with the policy dividends of the country in the Shanghai Free Trade Zone, we will assist foreign-funded enterprises in settling down, growing and strengthening in Shanghai.

In the process of continuously forging internal strength, the service functions of financial institutions have also been significantly upgraded.

Persistent empowerment

Serving the real economy is the mission of finance.

For the past decade, China Merchants Bank has always been paying attention to market trends and providing customers with diverse financial service choices. The China Merchants Bank Capital Operations Center is located in Shanghai, leveraging the advantages of the Shanghai International Financial Center and leveraging global layout and multi regional linkage in various time zones to achieve 24-hour uninterrupted global investment transactions and customer services.

In recent years, China Merchants Bank has developed its "CMB Risk Avoidance" characteristic products, providing strong support for enterprises in the region to manage risks and reduce costs. Through the NRAOSAFTN account system, we provide complete offshore account services and form a differentiated service model with rich practical experience.

A leading domestic semiconductor company plans to issue US dollar bonds overseas. Due to the long preparation time for bond issuance and market fluctuations, the company hopes to lock in the cost of bond issuance in advance. The head office and branch of China Merchants Bank jointly formed an expert group to discuss the details of the plan and the accounting treatment method for corporate hedging. Through FTN design of account bookkeeping and accounting plans, the plan design and text revision of bond forward products were efficiently completed, and overseas bond underwriting licensed institutions were linked to seize the best trading opportunity in the market and lock in the cost of bond issuance.

Bulk trading enterprises have the characteristics of large business volume, high efficiency requirements, and price sensitivity. China Merchants Bank has established a professional service team, established a global inquiry system and mechanism, fully utilized the advantage of FT accounts in connecting with overseas market prices, searched for the optimal resource allocation globally, tailored cross-border trade financing product solutions for bulk trading enterprises, and implemented non resident FT fee services for multiple bulk trading enterprises, enabling domestic banks to compete with foreign banks on the same platform.

Such stories are countless in ten years. Through trade and investment facilitation reforms, China Merchants Bank Shanghai Branch has successfully helped market entities reduce operating costs, expand investment and financing channels, and avoid market risks, fully leveraging the advantages of Shanghai Free Trade Zone as a pioneer.

Over the past decade, China Merchants Bank Shanghai Branch has also closely aligned and aligned with a series of major national strategies undertaken by Shanghai. In recent years, the Shanghai branch has focused on resource sharing and customer interaction with major branches within the system, leveraging the characteristics of various products, policies, channels, and other aspects of the free trade zone and new areas, providing excellent experience and cases, actively linking with sister branches in the Yangtze River Delta region, and bringing more convenience to enterprises in the Yangtze River Delta to enjoy the dividends of Shanghai's free trade policies.

The "going global" strategy for service enterprises is a main thread. In response to the two types of cross-border funding needs of overseas and domestic subsidiaries in the process of Chinese enterprises going global, cross-border fund pools, as cash management products, provide more space for multinational enterprise groups to manipulate financial funds, significantly improve the freedom of fund use, and reduce the cost of enterprise fund utilization and exchange rate management... With rich experience in offshore banking business, CMB has also developed a complete comprehensive cross-border financial service system from six dimensions: overseas investment architecture design and construction, investment destination country risk prevention, overseas financial and fund management, exchange rate risk management, diversified overseas financing, and local financial services in investment destination countries.

The essence of service is empowerment. Being in an international financial center, a successful financial institution needs to inject blood into the economic cycle, empower enterprises aspiring to the global market, and ultimately empower a city to better become an open hub gateway and more efficiently allocate global resources.

In the new decade, China Merchants Bank Shanghai Branch will actively respond to national strategies, always adhering to the core values of "customer-centric, creating value for customers", relying on the free trade innovation platform and China Merchants Bank's "Five in One" service system, supporting more high-quality enterprises to go out, fully supporting the construction and development of the free trade zone, and consolidating the foundation to move towards the next decade!