(Yicai) March 24 -- Chinese companies' accelerating internationalization demands a more robust and diverse ecosystem of financial services, experts said during the latest seminar of the Lujiazui Finance Salon.

Chinese firms have been intensifying their efforts to expand abroad since 2020, emphasizing the demand for efficient financial services, business leaders and financial professionals told Yicai during the seminar that concluded on March 22. Last year, China's outbound direct investment reached CNY1.16 trillion (USD159.6 billion), up 11 percent from 2023, according to official data.

Shanghai's Pudong New Area established the Lujiazui Finance Salon this year to create a platform for exchanges and cooperation within the financial sector. The salon, which is supported by Yicai, is expected to host as many as 40 seminars by December.

Cross-Border Settlement

Wang Xiao, president of the Shanghai branch of the Bank of China, said that for enterprises going overseas, the convenience and efficiency of settling cross-border funds are vital. In the early stages, most firms struggle with difficult and slow settlement so financial institutions could facilitate digital and convenient settlement to ensure efficient operations, Wang added.

Moreover, Chinese companies are entering diverse countries and regions, many of which have strict foreign exchange controls. Financial institutions could meet enterprises' multi-currency needs through a combination of domestic and foreign products and services, and strengthen the guarantee of cross-border capital supply, Wang proposed.

International endeavors tend to have a long lifecycle, so the risks associated with exchange rate fluctuations are significant, Wang said, suggesting that financial institutions could tailor personalized solutions to meet customers' specific needs for hedging, enhancing cross-border risk prevention and protection.

Information Barrier

Chinese companies going overseas often face unfamiliar political and regulatory environments, substantial legal and cultural differences, language barriers, insufficient understanding of the market and competitive environment, and a lack of local partners, according to the BOC executive. Financial institutions could leverage their overseas channels and resources to help enterprises overcome the "information barrier" and explore new prospects, he added.

Tu Qun, vice president of the local branch of China Construction Bank, proposed the construction of a comprehensive financial service ecosystem based on three core dimensions: a global network, full-lifecycle coverage, and the strategic internationalization of the yuan.

Qian Xinliu, managing director of HSBC China, pointed out that the London-headquartered lender provides Chinese firms with a full range of services involving trade finance, treasury and foreign exchange management, mergers and acquisitions, and debt capital markets, to meet their needs when expanding abroad.

Liu Huan, deputy general manager of a cross-border department of Ant Group, said that the fintech affiliate of Alibaba Group Holding provides fast, convenient, and affordable cross-border capital services for e-commerce merchants. The operator of mobile wallet Alipay works with partners to help Chinese enterprises go global, leveraging the technical advantages of mobile payments to make business travel easier, Liu added.

Editor: Emmi Laine