Global Times | China’s Hainan FTP launches cross-border asset management pilot program
China's Hainan Free Trade Port (FTP) on Thursday launched a cross-border asset management pilot program, enabling overseas investors to access domestic financial products offered by local financial institutions. This is an important step in the FTP's financial opening-up and will provide a new boost to the internationalization of the Chinese yuan, an expert said.
Under the pilot program, eligible products include wealth management products, private asset management products from securities, fund, and futures operators, publicly offered securities investment funds, and insurance asset management products, according to a circular on the website of the State Administration of Foreign Exchange (SAFE).
The program aims to diversify cross-border financial product offerings and explore new channels for overseas investors to access China's domestic market, according to an official of the Hainan branch of the People's Bank of China (PBC), the central bank, the Xinhua News Agency reported.
It is expected to attract both domestic and international asset management institutions to operate in Hainan, supporting the development of the Hainan FTP, according to the official.
The implementation of the pilot program sends an important signal in the FTP's financial opening-up and carries profound strategic significance, Liang Haiming, dean of the Hainan University Belt and Road Research Institute, told the Global Times on Thursday.
"It not only reflects institutional innovation but also demonstrates the country's steady and prudent exploration in financial opening-up," Liang said. In the long term, the initiative is poised to drive a shift in regional development momentum, elevate Hainan's strategic status within national development priorities, and serve as a landmark model for institutionalized opening-up.
Pilot asset management products that overseas investors put money into will be priced and settled in yuan, according to the SAFE document.
"The cross-border asset management pilot program priced and settled in yuan represents not only a technological breakthrough but also an important exploration in the internationalization of the yuan," Liang said. As policy effects gradually materialize, the yuan is poised to play a more significant role in global asset allocation, strengthening its functions as both a store of value and a medium of exchange.
Recently, the Hainan branch of the PBC completed the financial tasks required for Hainan's island-wide independent customs operation, achieving breakthroughs in cross-border finance expansion and cross-border trade and asset management, according to the branch.
Regarding free and convenient cross-border capital flows, the number of multi-functional exchange facilitation (EF) accounts in the FTP has expanded significantly. Launched in May 2024, the EF account system now covers 10 pilot banks, with 483 accounts opened and cumulative cross-border transactions reaching 172.6 billion yuan ($24.05 billion) as of July 28, data showed.
The pilot implementation of cross-border asset management in the Hainan FTP serves as a critical testing ground for not only the opening-up of China's financial sector but also the nation's overall opening-up, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Thursday.
With favorable zero-tariff measures in place after the independent customs operations begin at the end of this year, high-quality global resources can flow into Hainan with greater access and efficiency, Dong said, calling for domestic and foreign enterprises to seize the valuable opportunities in Hainan for greater development.
The move on Thursday came as the Hainan FTP is scheduled to officially launch an island-wide independent customs operation on December 18. With this major step, Hainan is poised to become not only a tourist haven but also a pivotal gateway for China's opening-up drive.
From 2020 to 2024, Hainan attracted more foreign investment than it did in the entire 32 years since becoming a province, while its goods trade grew at an average annual rate of more than 30 percent, official data showed.