While in Shanghai, our group was fortunate enough to do a company visit at HSBC. Serving around 51 million customers worldwide, HSBC is one of the world’s largest banking and financial organizations. HSBC was founded in 1865 to finance trade between Asia and the West, and is now acknowledged as “the world’s leading international bank.” HSBC China currently has a branch network of 175 outlets across 57 cities. This includes 33 branches and 142 sub-branches. HSBC China is the largest service network covering the widest geographical reach by any bank in Mainland China; according to HSBC Group Chief Executive, Stuart Gulliver, “HSBC is well-positioned in the faster-growing markets and across international trade flows to benefit from these engines of global growth.”
Not knowing much about HSBC or the banking systems in China, I found this visit to be very informative and as I gained some insight on the Chinese market. For example, because the Chinese government is more centrally controlled and much more strict than the United States, the banks operate differently. This is because the Federal Reserve takes monetary responsibility in the United States as opposed to the Banks that take most of the monetary responsibility in China. In Mainland China, the People’s Bank of China is the central bank of China with the power to regulate the financial institutions in Mainland China and power to control the monetary policy.
Since 2010, HSBC began establishing a network of China Desks around the world, in hopes to assist Chinese businesses to create cross-border trade, investment, and financing.
While in Shanghai, we also attended a lecture series about the Shanghai Free Trade Zone. There I learned that since China officially joined the World Trade Organization in November 2001, foreign investment and trade has grown rapidly as a result. According to HSBC China’s Executive Summary, “a more open market will attract know-how, technology, services and materials. These imports, together with China’s rich manpower, both skilled and unskilled, have turned China into one of the most important manufacturing bases in the world.” While China still holds a number of challenging areas for foreign investors, the Chinese government is making efforts to address some of these areas in order to encourage foreign investment. Also, I learned that large areas of China’s economy are now increasingly becoming more market oriented. In one of the lectures, we were told that with the help of new regulations and the Shanghai Free Trade Zone, there will be: an innovative new mechanism for financial regulations, develop new models for administrative services, expansion of new development patterns of trade (through headquarter economy, service functions, financial service functions, and shipping service functions.) It is believed that the Shanghai Free Trade Zone with all of its economic and financial initiatives will be completed by the year 2020. With less than five years away from this expected date, I am excited to learn more about its progression and how their plans play out.