Looking back on the extraordinary year of 2023, the Financial Work Office boldly embraced reforms, bolstered the real economy, steadfastly safeguarded against financial risks, and provided a vivid demonstration in Huzhou, aiming to build a financially strong nation through high-quality development in the financial sector.
Data Highlight: The City's bank loan balance surged past “Trillion-yuan milestone”, hitting RMB 1.0546 trillion, with a 19.87% YoY increase, topping provincial growth rates. The financial sector's value-added growth also led the province. Seven new listings marked a historic year, ranking second in the province, swelling the cumulative total of listed companies to 56.
Honors Recap: Huzhou led nationwide transition finance reform, pioneered five innovative systems and was twice featured as a G20 Sustainable Finance Working Group model. Its ESG evaluation standards for micro and small enterprises (MSEs) were chosen as a national standardization pilot project, and it debuted China's first exchange-traded bond for MSE support.
Achievements: Huzhou has successfully weathered the "Stress testings" posed by major events like the Hangzhou Asian Games, achieving the top rank in provincial evaluations for preventing and resolving financial risks among comparable regions.
Huzhou's Financial Sector: A Leading Example
Financial Snapshot: Among 27 Huzhou-based bank branches, 18 have become headquarters-level green finance pilot demonstration banks, with loan-to-deposit ratios all surpassing 100%. The proportion of green loans in the City's total loan balance stands at 31.3%, ranking first in the province. MSE ESG evaluation standards were chosen as a national standardization pilot project. Ten innovations, including "Quick Green Loans for MSEs" and "Bamboo for Plastic" Green Loans, have been launched. Moreover, Huzhou has gained 66 “Huzhou Pioneer” experiences in green finance.
Last year, HZGF was inaugurated in Huzhou, jointly established by IFS and the Huzhou Municipal People’s Government. HZGF focuses on transition finance, ESG investment and financing, biodiversity finance, and other related topics, aiming to emerge as a nationally influential think tank for green finance research, a capacity-building support platform, and an international cooperation and exchange hub.
The establishment of HZGF epitomizes Huzhou’s leading role in demonstrating advanced practices in green finance. Last year, Huzhou unveiled multiple pioneering institutional results, including Transition Finance Support Activity Catalogue and debuted over 30 carbon finance products, including the "Transition Loans" and "Carbon Efficiency Loans", vigorously supporting the transformation and upgrading of high-carbon industries like chemical fibers and textiles.
Inclusive finance is a crucial means to achieve common prosperity. With the focus on promoting common prosperity, Huzhou guides financial institutions to concentrate on sectors such as agriculture, rural areas, farmers, and MSEs. It also integrates green finance standards and principles into the process of inclusive financial services, and innovates to develop financial products and services that embody both green and inclusive characteristics. Moreover, the City has introduced China's first Pilot Program for a Green Finance Guarantee System, directing guarantee resources towards green and inclusive areas. To date, the total balance of green guarantees in the City stands at RMB 310 million, marking a 68.2% increase.
As green finance reforms advance, the brand of Huzhou's green finance continues to shine brighter. In the past year, international entities like the United Nations Development Programme (UNDP), International Sustainability Standards Board (ISSB), British Embassy Beijing, and Climate Bonds Initiative (CBI) visited Huzhou to study its green finance endeavors. In turn, Huzhou was invited to share its experiences at events such as the meetings of UK-China Green Finance Taskforce and the Green Finance Summit of the Greater Bay Area.
Financing Supply Boasts Both Quality and Quantity Improvement
Financial Snapshot: The City's banking loan balance surged past "Trillion-yuan milestone”, hitting RMB 1.0546 trillion, with a growth rate outpacing the provincial average by 5.67 percentage points, claiming the top spot in the province. Likewise, the financial sector's added value growth also led the province.
"Funds arrived within 10 minutes, remarkably swift." commented by the head of a manufacturing company in Lijiaxiang Town, Changxing County. Last year, China Merchants Bank Huzhou branch learned that the company experienced a decline in revenue due to external environmental factors, and was facing a tight cash flow situation. The bank promptly visited and guided the company to apply for "Flash Loans for MSEs" on mobile phone, securing a RMB 20 million credit line within 10 minutes. "No collateral, daily interest, pay-as-you-go. This has really alleviated our pressing financial needs." the company head added.
The economy is the muscle, finance is the bloodline, and both are symbiotic and co-prosperous. Last year, the City diligently advanced an upgraded smooth financing facilitation project, harnessing "Government Action" to spur "Enterprise Satisfaction", thereby striving to build a city with the most favorable financial ecosystem. The introduction of the Implementation Plan to Foster the Optimal Financial Ecosystem and Empower High-Quality Development through Financial Integration reinforced mechanisms like “Open bidding for selecting the best candidates in industrial and financial sectors”, enhancing practical service approaches. Simultaneously, intensified efforts were directed toward bolstering key areas and pivotal links, notably the "2+8" platforms, to fully mobilize the enthusiasm of financial institutions in supporting MSEs, private economy, and other vulnerable sectors, and to stabilize and enhance the quality of the economic trajectory.
To govern an industry is to manage investments, and to steer an industry is to attract investments. Last year, following a "Systematic, Platform-centric, and Checklist-driven" investment strategy, Huzhou essentially established a financial investment attraction landscape, with the Southern Taihu Lake Green Finance Center as the primary platform. Throughout 2023, the City successfully attracted 130 various financial entities, including 11 licensed financial institutions, 115 emerging financial organizations, and 4 financial ecosystem enterprises.
Listings March Steady with Rapid Steps
Financial Snapshot: Huzhou achieved a record-breaking year with seven new listings, ranking second province-wide, bringing the total count of listed companies to 56.
In the past year, the City capitalized on the comprehensive registration system reform and the Beijing Stock Exchange (BSE)'s high-quality expansion, vigorously promoting high-caliber enterprises' access to capital markets. Remarkable achievements were seen in the efforts of listed enterprises. Tianhong Lithium-ion Battery was the first BSE-listed company in the City. With 56 listed companies in total, the City has achieved comprehensive coverage across major domestic and overseas exchanges and key listing segments. Strategic collaboration with the Shanghai Stock Exchange (SSE) advanced the City as a green finance benchmark, inaugurating the SSE Green Finance (Yangtze River Delta) Service Center, co-releasing two green finance indices, and issuing China's first exchange-traded bond for MSE support. A strategic cooperation agreement on "Tax+Finance" services for enterprise listings was signed with the Municipal Taxation Bureau, further optimizing tax services for listing enterprises and mitigating tax-related risks. Guidelines for Attracting Pending Enterprises Listed Overseas were also formulated and issued, successfully guiding four top-tier firms, namely Baijiayun, Seacon, MedSci Healthcare, and SDA, to list overseas. Senior leaders from the Zhejiang Securities Regulatory Bureau were invited to conduct research in Huzhou and convene a symposium on enterprise listings, bolstering confidence among promising prospective listed enterprises.
Meanwhile, Huzhou emphasized on sci-tech finance to stimulate innovation-driven vitality. The City unveiled the Implementation Opinions on Sci-Tech Finance Reform and Innovation, exploring the establishment of a science and technology financial service system that caters to the full life cycle of financial needs for tech enterprises. By the end of 2023, the loan balance for science and technology-based MSEs in the City hit over RMB 85 billion, expanding at 24.41%, surpassing the average loan growth by 4.57 percentage points. Efforts intensified to attract high-caliber financial talents, with submitted applications for two national "Ruijin Plans". The launch of the Huzhou Financial Consultants Studio paired 157 finance specialists with 500 science and technology talent enterprises across the City. In 2023, the Studio cumulatively resolved financing needs totaling RMB 1.866 billion for 124 science and technology talent enterprises.
Additionally, Huzhou intensified equity investments to broaden financing channels for enterprises. It launched ten municipal industrial funds totaling RMB 25.152 billion and prompted local districts and counties to hasten the setup of "Phoenix Funds". The City advanced QFLP pilot constructions, debuted the Province's first QFLP Pilot Operation Regulations (Trail), and bolstered the regulated and orderly development of foreign-invested equity investment firms in the City. Notably, the QFLP Pilot Fund for Ventech China in Changxing County, worth RMB 300 million, was successfully established.
Effective and Favorable Risk Mitigation
Financial Snapshot: Huzhou conducted 44 joint inspections, and examined over 1,000 financial entities, with 39 high-risk institutions phased out. It took the lead in the provincial assessment of financial risk prevention and mitigation among comparable regions.
On March 9 last year, Zhejiang Provincial Training Conference on Financial Risk Monitoring and Prevention Application "Dragnet" took place in Hangzhou. At the conference, the Financial Work Office of Huzhou Municipal People's Government, as the sole prefecture-level representative from the local financial sector, shared its financial risk prevention and control practices, contributing "Huzhou Experience" to the province's financial risk prevention and control efforts.
Preventing and resolving financial risks is paramount in financial endeavors. Last year, adhering to the general principle of “Seeking progress while maintaining stability”, the City firmly upheld the bottom line of preventing systemic and regional financial risks. A risk coordination and disposal mechanism was established, characterized by "Government leadership, departmental collaboration, enterprise self-help, and bank assistance". Adopting tailored "One enterprise, one policy" strategy, the City successfully addressed key enterprise debt risks and listed company stock pledge risks, resolving 116 financial risk incidents involving enterprises throughout the year.
Meanwhile, Huzhou formulated and issued the annual regulatory work plan for local financial organizations, implementing classified and tiered supervision over all local financial organizations in the City. It also piloted online real estate registration services for local financial organizations, and expedited reforms in government-backed financial guarantee institutions.
The City coordinated with relevant authorities to combat and prevent illegal fundraising and other financial misconducts. Moreover, it formulated and implemented regulations for rewarding whistleblowers of illegal fundraising, and conducted in-depth work on clue investigation, case handling, and asset recovery. In 2023, the number of newly reported illegal fundraising cases in the City remained at a low level across the province.
Outlook
In 2024, the Financial Work Office of Huzhou Municipal People's Government will strive to establish a national green finance reform and innovation demonstration zone as its central objective, and comprehensively advance key tasks including serving the real economy, deepening financial reforms, and managing financial risks. These efforts are geared towards accelerating the development of "Six-New Huzhou" and contributing financially to the high-level construction of an ecological civilization model city.
Huzhou will elevate the quality of financial development. Adhering to the path of marketization and rule of law in promoting financial innovation and development, the City will strive for high-quality growth in the financial sector. Key financial indicators, including the growth rate of bank loans, the growth rate of the added value of the financial industry, the proportion of green loans, and the quality of banking credit assets, remain among the top three in the province. Throughout the year, social financing increased by RMB 250 billion, and five new companies were listed.
Huzhou will deliver precise and potent support to entities. Upholding the fundamental principle of aligning financial services with the real economy, the City is committed to building an optimal financial ecosystem, providing high-quality services for socioeconomic development. Mid-to-long term loans for the manufacturing sector, inclusive finance loans for MSEs, green loans, agriculture-related loans, and private economy loans all expanded rapidly. Moreover, the guaranteed balance of government-backed financing has reached the provincial target.
Huzhou's financial reforms will continue to lead the way. Adhering to the deepening of supply-side structural reforms, the City is establishing a provincial-level pilot for transition finance reforms with high standards. By refining green finance institutional standards, organizational structures, product and service offerings, policy incentives, digital empowerment and other work systems, the City sustains its vanguard in national green finance reform and innovation, augmenting its global footprint with five new green finance standards. The "Green Credit" Platform has aided 50,000 enterprises, while "Carbon Accounts" have been set up for 10,000 enterprises. Furthermore, the City advances sci-tech finance reforms and innovations, fostering synergistic growth among finance, technology, talent, and industry sectors.
Huzhou will effectively manage financial risks. Sticking to risk prevention as a perpetual theme of financial works, the City comprehensively strengthens financial supervision to effectively prevent and resolve financial risks. Over 1,000 financial institutions were scrutinized for risk issues throughout the year, and preventive campaigns against illegal fundraising reached over 800,000 individuals, effectively curtailing illicit financial activities. Key financial case (incident) resolutions progressed steadily, preventing the spread or escalation of "Two-Chain" risks. Moreover, the City consistently maintains a low incidence of newly reported illegal fundraising cases, compared to the provincial average, effectively safeguarding against regional systemic financial threats.
Source: The Financial Work Office of Huzhou Municipal People's Government
HZGF