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Boosting FinTech in Shenzhen, China

The financial sector in Shenzhen, Guangdong province should be getting the support it needs to foster greater growth in the area. A series of new measures have been launched to support Financial Technology (FinTech) with the goal of further strengthening financial advantages and promoting regional development in the Guangdong-Hong Kong-Macao Greater Bay Area, officials and experts said.

The measures are comprehensive. To this end, three government documents were unveiled taking into account three things: the development of financial enterprises, financial technology and venture capital. According to the new policies, newly registered financial enterprises that have headquarters in Shenzhen will be granted up to 50 million yuan (US$ 7.9 million) in a one-off incentive. Additionally, major financial institutions set up in Shenzhen, including clearing centres, data centres and scientific research centres, will receive a reward of up to 20 million yuan (US$ 3,079,956).

What’s more, the southern metropolis will also provide support for FinTech enterprises to go public and help expand avenues for them to raise funds in various ways, such as bond issuances and asset securitisation. For newly established equity investment firms and venture capital firms or those who newly move their business to Shenzhen, an incentive of as much as 20 million yuan (US$ 3,079,956) will be offered if their investments meet certain requirements.

The aim of launching these policies is to further optimise Shenzhen’s financial policy system, build a world-class ecosystem and promote high-quality development of the city’s financial industry, said He Jie, Head of Shenzhen’s financial regulatory bureau. In this way, the industry could better serve the real economy and the city’s cohesiveness and competitiveness as a financial centre could be further enhanced, he said.

Finance has been one of the pillar industries in Shenzhen’s economic growth. Value-added tax in the financial industry amounted to 473.9 billion yuan (72,984,059,470) last year, accounting for 15.4 per cent of the city’s Gross Domestic Product (GDP), according to official statistics. Approximately 166.2 billion yuan (US$ 25,596,013,260) in taxes were generated by the industry in 2021, which made up 24 per cent of the city’s total tax revenue. That’s the biggest contributor among all industries.

Finance is at the heart of the region. Accordingly, Shenzhen ranked 10th in the global ranking of financial centres, advancing six places from half a year earlier. Boosting its financial sector is a timely move for the region. FinTech and venture capital are the two financial segments in which Shenzhen excels, compared with other major financial centres in the country such as Beijing and Shanghai. By focusing on the two areas, Shenzhen could further sharpen its edge and give better play to its advantages, he said.

Digital transformation has indeed brought a lot of positive change for China as a whole. The emerging technologies in the 2022 Beijing Olympic Games are a testament to that. With Artificial Intelligence, for instance, people of different languages from different parts of the world can monitor the games with a virtual translator assistant. That includes catering to the hearing impaired as the AI assistant can translate what is said in one language into sign language.

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