Financial & Professional Services Focus Group Quarterly Update - Q1 2014

Published on 2014-02-21

In 2014, the Financial & Professional Services Focus Group is planning events to cover tax, alternative investments, insurance & risk, and all matters related to the economy.

By Rory Farquhar-Thomson, Head of Corporate & Institutional Banking, Intesa Sanpaolo S.p.A.

2013 was another eventful year for the FSFG where we ran a total of seven business events, one social event and three Focus Group Meetings. At our final meeting in November in the plush surroundings of HSBC Lujiazui we penned an aggressive program for the current year whilst working our way through HSBC’s cellar of fine wines.

We are planning events to cover tax, alternative investments, insurance & risk, and all matters related to the economy. Shanghai is well on the way to achieving its goal of becoming a global financial centre by the year 2020 and we shall be monitoring developments and milestones on this road. We also have a range of VIP’s passing through our town where we aim to host breakfast or lunch briefings to keep our membership up to date with the latest views. We hope to maintain our links with the Shanghai Arbitration Court with another visit together with interested members.

2014 promises to be another challenging year for the Financial Services industry. The growth of cross border RMB trade continues as now the RMB has surpassed the EURO in becoming the world’s second largest trading currency (by volume). It is true that the beginning of 2014 was not easy for the world’s second largest economy but many of us still believe that China’s fundamentals remain strong and that the Government has not only the will but also the resources to manage steady growth throughout the year. After the 7.7% achieved in 2013 we see a similar level for 2014 as achievable (7.5%). Services are becoming more important in the rebalancing of China’s economy and urbanisation will continue to be an important theme as China increasingly emphasises consumption over investment as a major driver for growth. Deposit insurance is on the agenda and is another important step in the financial picture that continues to shape China’s journey towards market reform.

Furthermore the opening of the new Free Trade Zone in Pudong in September 2013 is another key step in the development of China and its pivotal role in world trade. As yet the FTZ poses more questions than answers but many believe that it ultimately represents a blueprint for what may become the future of China including full RMB convertibility, liberalisation of interest rates and a freer market economy. There are obviously huge implications for the Financial Services industry and the FSFG expects to work together with the newly established FTZ focus group in order to ensure that our members have the latest information and access.

But there are clouds on the horizon as well. Credit is still growing too fast, so called shadow banking remains an issue and regulatory reform is slower than many of us have hoped. In the FSFG we shall strive to react to changes in these major issues and bring them to the attention of our membership through our events and articles to be posted on the website.

Fortunately we are privileged to be able to draw on a wealth of experience from the top UK accounting firms to provide us with valuable insights into tax changes that affect both individuals and companies in China; our major banking partners will provide top economists to give the membership insight into the economic environment and what the future may hold. And we are grateful to our membership for your time and energy and we look forward to welcoming you to many of our events throughout the year.

In the FSFG we believe in mixing business with pleasure. After the first alternative investment dinner where members considered the merits of wine, contemporary art and diamonds, last year the second in this series took us to CARPETSTAN where members considered the benefits of investing in beautiful rugs whilst enjoying a glass of wine and pizza. This year we shall be getting to grips with whisky so we shall be well prepared for the possibility of Scottish independence!

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