06/17/2024 Source: cnbayarea.org.cn
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The DBS Greater Bay Area Conference 2024 was held in Shenzhen on June 5. During the conference, Sebastian Paredes, Head of North Asia at DBS and Chairman of DBS China, accepted an exclusive interview with Southcn.com.
Paredes expressed optimism about the Chinese economy in the second half of 2024 and reaffirmed that DBS, the Singaporean bank, has long-term commitments to China. He also shared the major expansion plans of DBS in China, especially in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
Deregulation expected to boost economic growth
Paredes considers deregulation, especially in the real estate and investment sectors, as giving a strong message of China's commitment to fuel economic growth. "Most of the policies focus on the supply side, which is important and positive. The policy indicating that the government is committing to buying parts of the unsold units to support public housing is also an important step to reactivate the demand side," he analyzed.
In addition, Paredes highlighted China's efforts in stimulating investment in advanced technologies. "For example, China set up a $47.5 billion fund for the semiconductor industry. It supports instilling investments in artificial intelligence and the production of Chinese-made chips. I think that these are very important engines of growth.
Paredes believes that China's economy will have better performance in the second half of the year because the measures of deregulation are going to create confidence, and confidence will drive spending. Spending will drive a positive circle that will support the development of the real estate sector and the retail sector.
Paredes stressed that DBS sees China as a critical driver of growth in Asia and believes in the long-term success of China. He said DBS will continue to invest in China and support Chinese entities and individuals both onshore and offshore.
"In the last 18 months, we've strengthened strategic partnerships with domestic platform companies, and through these collaborations, we increased consumer finance lending by more than 80 percent. We have initiated a securities joint venture, DBS Securities, and are able to support Chinese companies to IPO in Hong Kong and support their internationalization efforts," he introduced.
DBS actively engages with GBA through cross-border financial connects
Paredes emphasized that DBS kept a close eye on the development of the GBA and dramatically increased its participation in the onshore-offshore linkages between Hong Kong and mainland cities of the GBA through the Shenzhen-Hong Kong stock connect, the bond connect, and the Cross-boundary Wealth Management Connect (Cross-boundary WMC).
Launched in 2021, the Cross-boundary WMC is one of the key initiatives under the mutual market access schemes, allowing eligible residents of nine mainland cities, Hong Kong, and Macao in the GBA to invest in wealth management products distributed by banks in each other's market.
"We are the only bank in the GBA that has three partners for the cross-boundary wealth management connect. DBS China, Shenzhen Rural Commercial Bank, and Postal Savings Bank are the three partners of DBS Hong Kong," Paredes introduced.
The Cross-boundary WMC launched the 2.0 version earlier in February this year. Paredes saw customers are happy about the new version because they can connect with more international products as the offshore market is improving. "Most importantly, the 2.0 version increases the maximum quota individuals can invest, and its product capability now is much more suitable to give higher returns," he said.
To expand its reach in the GBA, DBS increased its shareholding to 17 percent in Shenzhen Rural Commercial Bank and is now the largest shareholder of the Shenzhen bank. "We are happy to participate in the domestic economy of Shenzhen through this partnership, especially in the mass market and SMEs, which is complementary to the business of DBS China," said Paredes.
Thus far, DBS has five branches in the GBA, covering Guangzhou, Shenzhen, Dongguan, Hong Kong, and Macao, and provides services including wealth management and offshore support.
"The growth rate of corporate and institutional banking in the GBA is higher than the average growth rate of DBS China and DBS Hong Kong. We saw many GBA enterprises with plans to explore overseas markets and have 700 new accounts opened in DBS Hong Kong per month," Paredes shared.
DBS recognizes China's technological capability
Paredes considers the GBA as a unique area in China for its entrepreneurship, focus on advanced technologies, experience in manufacturing and exports, and the mindset of linking China with the world. He stresses that the achievement of advanced technologies in the GBA has noticeably contributed to the national GDP.
"We have established the third technology center for DBS Group in Guangzhou City, China. We plan to have approximately 2,000 engineers in this technology center to support all technological development for the Group. It is a significant testament to our recognition of Chinese capabilities in the sector," said Paredes.
Paredes also mentioned that the establishment of the technology center indicates a strong commitment from DBS to support the development of the GBA. "I believe that the GBA will continue to show high levels of growth and innovation. We want to expand in mainland cities, Hong Kong, and Macao, and continue to demonstrate our strengths in connectivity with ASEAN and offshore support," he said.
He highlighted generative AI as the theme of the DBS Greater Bay Area Conference 2024. "It's an area that is attracting the most capital in the world, so we want to be more current and relevant and gather government officials and entrepreneurs from the GBA and ASEAN countries to showcase the potential for cooperation," he said.
(cnbayarea.org.cn & GDToday)
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