Supporting investment in the real economy

Authorities encourage companies to promote industrial development

Since it was established 10 years ago, the Guangdong Financial High-tech Zone in Foshan, Guangdong province, has made great achievements in supporting the real economy and promoting innovation and entrepreneurship with sound financial services.

Founded in 2007, the zone has attracted 364 professional financial institutions and companies, with total investment volume reaching 70 billion yuan ($ 10.58 billion) at the end of November.

"The financial institutions include banks, insurance companies, bond providers, private venture capital, internet finance companies and service outsourcing companies, which serve and boost the real economy, especially the manufacturing industry," said Qiao Jifei, deputy head of Nanhai district, Foshan, where the zone is located.

Haisheng Financial Leasing Co, founded in 2016, is a typical example, Qiao said.

Haisheng is supporting advanced equipment manufacturing. Up to the end of October, the company had loaned 239 million yuan to 491 robot manufacturers in Foshan and other cities.

Haisheng has also granted credit to companies such as Zhongnan Aluminum Wheel to upgrade their manufacturing facilities.

Haisheng serves many other sectors, such as energy conservation and environmental protection, automobile manufacturing, medical apparatus and instruments and cultural and education industries.

Apart from encouraging professional financial companies to support local industrial development, the Foshan government has also established a support fund to help micro, small and medium - sized companies, Qiao said.

At most 20 million yuan can be provided to a qualified company for equity investment, risk compensation and financing assurance.

Meanwhile, the government has also been encouraging companies to obtain funds through direct financing over the past few years.

"Fifteen companies in Nanhai district have completed initial public offerings, and the number keeps rising," Qiao said.

Foshan launched a series of polices in 2015 to encourage companies to raise funds through bond markets. Among all the highlights of the financial services provided by the Guangdong Financial High-tech Zone is the Thousand-lantern Lake VC Town, which was launched in July.

"So far, a large number of venture capital companies, financial institutions, accounting firms and rating agencies have showed a strong intent to settle in the town," Qiao said.

Eighty venture capital companies with total investment funds of 9.6 billion yuan have already signed contracts for a presence in the town.

"A group of leading venture capital companies - Technology Financial Group, Shenzhen Capital Group and IDG Capital Partners have decided to settle in the Thousand-lantern Lake VC Town, assisting the town in developing into the venture capital center of the west bank of the Pearl River," said Huang Zhihao, a member of the standing committee of the Foshan Party committee.

The Thousand-lantern Lake VC Town consists of five functional areas, for venture capital, innovative finance and intermediary services, integrated services exhibition, incubators and living.

Having a large amount of private capital and being equipped with professional financial services, the town will inject strong momentum into the real economy of Foshan and even Guangdong, Qiao added.

According to the government plan, the total investment funds of the Thousand-lantern Lake VC Town are projected to reach 70 billion yuan, of which 5 billion yuan will be invested in Foshan in the next five years to support its real economy.

As for the need for industrial upgrading, the Guangdong Financial High-tech Zone has introduced measures to promote this.

The financing channels and structures in the zone will be further enriched, and the medium and long-term financing that the real economy needs most for transformation and upgrading will be strengthened, Huang said.

"We will establish a comprehensive social credit system to transform the financing model from mortgage-oriented to credit-centered."

The credit bureau of Nanhai district was founded in June under the instruction of the Guangdong Provincial Development and Reform Commission.

"The supervision and management of financing are being strengthened step by step. We will spare no efforts to crack down on illegal fund-raising, increasingly purifying the financial environment," said Qiao.

He also said that Guangdong Financial High-tech Zone is seeking to seize the opportunities presented by internet finance and has established incubators with experts and talents from research institutes and institutions of higher learning. 

(China Daily 12/06/2017 page24)