China Construction Bank Corporation: Serving the development of China (Shanghai) Pilot Free Trade Zone with financial innovation

Company Profile
As one of leaders of commercial banks in Chinese market, China Construction Bank (CCB) offers a full range of banking services to the private, corporate and financial sectors. Its products and service are in the leading position. By the end of 2014, CCB has been backed by a network of nearly 14,856 branches. CCB also operates branch offices in Hong Kong, Macao, Tokyo, Sydney, and Toront.
Challenge
Since the establishment of China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ or SFTZ) in 2003, the zone has been expected to have more financial reforms. The construction of FTZ is the “test field” of national major reform and institutional innovation. Serving the development of FTZ with financial innovation is an important issue for business bank to fulfill social responsibility, and is also an important opportunity to realize the innovation drive and transformation of development.
Solution
Under the guidance of Shanghai headquarters of People’s Bank of China, CCB started financial innovation practice early. The goal of CCB is to accelerate the real economy reform with finance serving FTZ. Its financial services program works for figuring out how to smooth financing channels of FTZ enterprises, how to reduce financing price, how to improve the convenience of cross-border investment and financing exchange, and how to streamline and optimize business process.
New process of financial service: For satisfying enterprises’ basic needs for settling in FTZ, CCB launches special service “one-stop service” to provide a full range of personalized services for them. CCB has done a number of first businesses and orders, and becomes the first to establish Free Trade Accounting Unit (FTU) in FTZ and the first Chinese bank that make cooperation with Gold International Bourse and Shanghai International Energy Corporation. Such business enhanced the ability of finance to serve real economy, broadened enterprises financing channel, reduced financing costs and improved the convenience of trade finance.
Paying attention to compliance and risk control: CCB not only develops FTZ business, but also puts risk control in the first place. It controls risks from pre-loan, loan to post-loan. Through institution and team building, service management and process formulation, it ensures effective and continuous development of businesses in FTZ.
Achievements
Serving innovation with finance is a way to broaden channels for companies borrowing foreign funds, release financial pressure of domestic bank and  effectively reduce financing cost of FTZ enterprises. The business innovation of CCB in FTZ has formed a good demonstration effect.It has promoted the in-depth development of the whole FTZ businesses, set up the pole for the early and pilot implementation of more innovative products, initially formed the innovative process that can be copied and promoted. Meanwhile, by taking effective measures to control risk, CCB secured that bad loans, overdue loans and credit risk issues haven’t been happened in FTZ. .
Prospect
As FTZ’s capacity is upgrading, CCB will always take serving real economy as its own duty, actively explore innovation road of state-owned commercial bank, and support and contribute to FTZ sustainable development. By exploring diversified oversea financing tool, CCB will adopt a macro-prudential regulatory framework in order to figure out more solutions for enterprises to tackle the problems like financing difficulty and expensive  financing.