As China highlights coordinated regional development as a key driver of the nation’s economic growth in the 14th Five-Year Plan period (2021-25), how the Yangtze River Delta region should contribute to this pursuit has figured in heated discussions among economists and policymakers.
The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China has underscored several policy priorities for the five-year plan period, including deepening major regional development strategies and promoting coordinated development among different regions.
The Yangtze River Delta, the cluster contributing a quarter of the country’s GDP and covering Shanghai as well as Jiangsu, Zhejiang and Anhui provinces, is expected to deepen integration and back the nation’s coordinated regional development, although a specific road map has not been decided.
We would argue that the financial services industry should lead the way to integrated development of the region, with Shanghai playing a more important role in driving related progress.
Finance is seen playing a pivotal role in social and economic development. For the integration of the Yangtze River Delta, it can serve as a key push in at least three aspects: promoting infrastructure connections; empowering innovative industries; and supporting growth of wealth and consumption upgrade.
The foundation of Yangtze River Delta integration is the linking of public services and infrastructure such as railways and highways, a process that entails a large amount of investment.
Financial institutions should step up innovation and improve financing services for infrastructure projects like those under the PPP(public-private partnership) framework.
Also, the establishment of a system of innovative industries lies at the core of enhancing the competitiveness of the Yangtze River Delta. The financial services industry can extend its role of helping market players in the region to sharpen their development capability, providing better financial services to both large corporations and the smaller ones with development potential.
Moreover, boosting people’s wealth and consumption is key to tapping into the potential of domestic demand during the 14th Five-Year Plan period, while per capita wealth and consumption in the Yangtze River Delta have long been in the forefront of the country.
To promote the accumulation of household wealth and consumption upgrade, the development of asset management and consumer finance services must speed up.