China's border region expedites reform to build a financial gateway for ASEAN

Pham Thi Nguyet Hoa, a vendor living in Vietnam's Mong Cai, comes to Dongxing, a southern Chinese port city, to sell Vietnam fruits every day. When night falls, she often ends up with thousands of yuan in her pocket, much more than what she can earn at home.

"Most of my customers are Chinese, and it is very convenient to exchange Chinese yuan to Vietnamese Dong as many banks in Dongxing have this currency exchange service," said Pham.

Tourism has been a pillar industry in the border city of southern China's Guangxi Zhuang Autonomous Region. Dongxing port saw 12 million people, of which half were tourists, pass through last year, ranking first among all land ports in China.

In the first six months this year, tourism consumption at the port exceeded 6.2 billion yuan (874 million U.S. dollars), up 40.4 percent from the year before.

The flourishing border tourism has brought a huge demand for currency exchange, with a slew of financial reforms rolled out in recent years.

In 2014, the ABC China (Dongxing Experimental Zone) ASEAN Currency business center was established in Dongxing, allowing direct convertibility of Chinese yuan and Vietnamese Dong.

In February 2018, a total of 8 million yuan was transferred in cash from Vietnam to China, marking the first cross-border cash transfer in Guangxi between China and Vietnam.

Fan Zuojun, vice president of Guangxi University, said the cross-border cash transfer will further promote the financial cooperation between China and Members of the Association of Southeast Asian Nations (ASEAN) as well as deepen reform and push forward the internationalization of the Chinese currency in the region.

China and ASEAN countries have always maintained close relations in trade.

In January 2010, the China-ASEAN Free Trade Area was set up, which has significantly boosted bilateral trade. China has maintained its position as the largest trading partner of ASEAN for 10 consecutive years, and trade between China and ASEAN has skyrocketed tenfold from 16 years ago to 587.8 billion U.S. dollars in 2018.

In the first half of 2019, ASEAN became China's second-largest trading partner, with bilateral trade volume reaching 291.85 billion U.S. dollars, up 4.2 percent year on year.

Guangxi's geographical advantages have also given it huge development dividends over the past decades. ASEAN has been Guangxi's largest trade partner for 19 consecutive years, and trade volume between Guangxi and ASEAN in the first seven months of this year topped 128 billion yuan, accounting for 48.7 percent of Guangxi's total foreign trade.

Now with the launch of the Guangxi Pilot Free Trade Zone (FTZ) in August, bilateral trade exchanges are expected to embrace another golden opportunity.

The pilot FTZ, with a total area of nearly 120 square km, will focus on modern financial services, smart logistics, digital economy, port shipping logistics, international trade and cross-border tourism, among others.

Guangxi vows to make greater efforts to consolidate its financial strength and build itself into an ASEAN-oriented financial portal, with over 90 financial reform measures being rolled out to further facilitate trade and investment and promote innovation in financial services with ASEAN countries.