Accompanying the Policy Measures on Promoting Dalian as a Regional Financial Center (Dalian Government Document No. 130, 2008) (hereafter shortened as the Policy Measures) released by the people’s government of Dalian, a brief introduction is as follows:
I. Background for & necessity of enacting the Policy Measures
Since 2008, the people’s government of Dalian has made great achievements in development of the financial industry after adopting a host of reward and subsidy policies in seven financial sectors based on the documents including the Policy Measures on Promoting Development of Financial Industry in Dalian (Dalian Government Document No. 96, 2008), and the Policy Measures on Promoting Steady, Healthy Development of Middle and Small-sized Enterprises:
•The public finance has accumulatively provided 460.918m Yuan as rewards or subsidies for financial enterprises.
•Under government coordination, middle and small-sized enterprises have successively acquired 737.34bn Yuan as loans from financial institutions.
•The middle and small-sized enterprises have accumulatively raised 630.63bn Yuan through a variety of channels.
•50-odd financial institutions are (were) newly established.
•The financial institutions have successively provided 300-odd innovative financial products and services.
•109 enterprises are listed on the stock exchanges.
Considering the change of circumstances after the preferential policies expired in 2015, it is necessary to revise the policy measures targeting the financial industry:
a. The Regulations on Promoting Development of Regional Financial Centers, which was legally effective as of January, 2016, specifies the requirement for improving the financial incentive mechanism, and hence, the need for enacting new policy measures for the financial industry.
b. Given the fact that the macro economic situation has changed from coping with the financial crisis and implementing an aggressive monetary policy to promoting the supply-side structural reform and improving the effectiveness of money supply, it is imperative to adapt to the new situation.
c. Since the 5th national finance work conference specifies that serving the real economy is one of the three major tasks in the financial work, and moreover, the national strategy of rejuvenating northeast China and the drive for building Dalian into the model of a pioneering city characterized by optimized industrial structure and advanced socio-economic development has put forward a higher demand for us to serve the real economy, it is important to encourage the financial industry to focus on the real economy.
d. Against the background that the major cities in China have introduced a host of preferential policies targeting the financial industry because of the intense competition for domestic financial resources, it is imperative to revise related policy measures to improve our competitiveness.
II. Process of Revision
We kick-started the work of drafting the Policy Measures in the first half of 2016. After evaluating the existing policy measures and referencing the experiences of other cities, we came up with a basic train of thought. Since early July in 2016, we hosted four symposiums attended by financial institutions, the supervisory agency, trade organizations and other agencies to collect their opinions. And subsequently, we organized the personnel to make a draft. After the first draft was finished in early September, we repeatedly deliberated on it with the municipal finance bureau, as well as the municipal social security bureau. Based on the draft made at the end of October, we solicited opinions from 65 entities including the finance supervision agency, governmental departments, districts, counties, county-level cities, the pioneering districts and financial institutions. After reaching a common consensus, we briefed the mayor and deputy mayors in charge of the final edition and invited them to offer their opinions so that the newly-enacted policy measures are more scientific and more competitive.
III. 1. Framework
The Policy Measures divides into 19 clauses of five chapters. The 1st chapter is the 1st part, introducing the background for enacting the policy measures, the intentions, fund use and management and other aspects. Aiming to encourage the financial industry to serve the real economy, further develop the financial system and optimize the environment for the development of financial industry, the 2nd part, which consists of the 2nd, 3rd and 4th chapters, puts forward 40-odd policy measures, such as encouraging enterprises to go public, incentivizing capital investment, providing services for the weak links, building the futures market, developing the financial system, cultivating talents, pooling up the effort for development, etc. The 5th chapter forms the 3rd part, making supplementary explanations on implementation of the policy measures, specifying the time limit for the policy measures, and stipulating the rights to interpret the policy measures.
2. Main contents and characteristics
a. By collecting and aggregating the effective supportive policies scattered in various sorts of regulations, the Policy Measures not only maintains policy continuity, but also facilitates publicity, interpretation and implementation of the policy measures.
b. Moderately adjusted structure
Considering the facts that many financial institutions are unable to honor their promises and the government’s incentive function is being weakened, we revoked some clauses on monetary reward in response to the de-leveraging requirement put forward by the CPC central committee and the state council.
c. Expanded coverage
By integrating the sectors (which shall be regulated by the local governments according to the No. 30 document issued by the state council in 2014, as well as the No. 23 document issued by the central committee of Communist Party of China in 2017) into the sphere of supportive policies, we aim at stronger growth of regional financial organizations and cultivation of new blood in the financial industry.
d. By remarkably enhancing the criteria on reward or subsidy for construction of futures markets, and by adding the contents on development of the equity investment industry, financial technology and open finance, we aim to intensify the leading role of futures markets, build an open financial system, and create a policy environment for the construction of venture capital centers which would have unique characteristics as financial centers.
e. By raising the criteria to the same as that practiced in Jinan city, Shandong province for rewarding financial institutions who locate the headquarters in Dalian, as well as regional financial institutions who open subsidiaries in Dalian, we aim to remarkably improve our policy competitiveness. (So far, the criteria are the highest in cities at or above the deputy provincial level in China.)
f. Moderate forward-looking design
By making a forward-looking analysis and policy arrangements involving undeveloped sectors or sectors which are non-existent in Dalian, such as commercial factoring, financial leasing, localized asset management companies, and which are expected to have better development, and by reserving proper policy space, we aim to maintain the stability of our policy measures.
g. Reduced discretion
By standardizing the practice in implementing the measures, such as rewarding or subsidizing financial innovations in terms of attracting financial investment, optimizing the financial market, and handling major financial risks, etc., we have reduced discretion to the greatest extent.
IV. The Policy Measures become legally effective as of January 1, 2018, with the rewards or subsidies promised by the government in the current year to be honored in the succeeding year.