Shanghai, Dubai bourses to expand financial cooperation amid further opening-up

The Shanghai Stock Exchange (SSE) and Dubai Financial Market (DFM) signed an agreement on Monday to co-develop financial products, a milestone in China's financial opening-up and a sign of deepening cooperation between China and the Middle East.

According to a memorandum of understanding, the exchanges will jointly explore and develop products related to environmental, social, and governance (ESG) and sustainable development to meet the needs of participants in both markets.

The two parties will also collaborate on the development of financial products such as cross-border indices and exchange-traded funds (ETFs), introducing their respective advantages to market participants and providing them with more diverse and convenient capital market services, China Media Group (CMG) reported on Tuesday.

"We are delighted to establish a partnership with DFM and look forward to deepening communication and exploring cooperation opportunities in areas such as indices, ETFs and ESG," Cai Jianchun, general manager of the SSE, was quoted as saying in the report.

He noted that the SSE will continue to enhance high-level institutional opening-up and explore diversified cooperation mechanisms with exchanges in the Middle East, in line with the unified deployment of China's securities regulator.

Hamed Ali, CEO of DFM, said that the signing of the memorandum marks an important step in strengthening international cooperation and promoting the development of capital markets of the two sides.

"In an ever-changing financial environment, global cooperation is crucial, and we hope to exchange best practices and knowledge with SSE to enhance the development of the financial ecosystem," he said.

The collaboration will serve as a model for financial cooperation between China and the Middle East, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Tuesday.

ESG cooperation is a leading and innovative field in international financial cooperation, and by leveraging the collaboration between the two financial markets, mutual investment in each other's markets can be pursued, Xi said.

International ESG funds can be used to invest in environmentally friendly, green and socially responsible investment products, Xi added.

The signing of the agreement comes days after China approved Mastercard's Chinese joint venture to conduct bank card clearing operations, underscoring China's pursuit of further financial opening-up.

China has steadily opened up the financial market in various sectors.

The central financial work conference that concluded in October also called for efforts to promote high-level financial opening-up. Specifically, the meeting urged to steadily expand institutional opening-up in the financial sector, improve cross-border investment and financing facilitation, and attract more foreign financial institutions and long-term capital to expand and conduct businesses in China.

Standard Chartered became the first foreign bank to trade bond futures in China in January. A much-anticipated program to allow mutual access to interbank interest rate swap markets between the Hong Kong Special Administrative Region and the Chinese mainland was launched in May.

This high-level openness has attracted various types of foreign financial institutions to expand in China. In the first 10 months of this year, newly approved foreign banks injected more than 2 billion yuan ($280 million) in capital, CMG reported.

The moves showed that China has demonstrated a step-by-step approach toward opening-up, and this trend is expected to continue with the introduction of new financial products and the opening-up of new sectors, Xi said.