Ladies and gentlemen, good evening. Thanks to the Bund Summit organization for this invitation, so it’s a pleasure and an honor for me to be here. I cannot start my speech without passing a message of sympathy to your country, its population and its authorities. During this crisis, the responsiveness of Chinese authorities and the strong resilience of Chinese population had impressed us all.
As mentioned in the Bund report, I think the Chinese financial system has indeed shown in recent years, a significantly higher level of openness. But before commenting on this opening, and that might surprise you, before commenting on its breath and speed, I think it's useful to pose a little and come back to the aim of any financial system, the reason why we all believe it should be open, and also the reason why this opening should also be done in a cautious way.
Indeed, the opening of the financial system corresponds for me to at least three different if not conflicting objectives, which is first and foremost, it has to enable and foster the development of the economy by channeling money to the right projects at the right moments, and a fair competition or an environment that fuels innovation tends to favor that. But that's also the second objective. The financial system has to be rock solid for obvious reasons. And third, it also has to be trustworthy. And I will include in that chapter, the finance should guarantee market integrity, control the origins of fund, or ensure the suitability of the product sold to the customer.
So as you can see, a financial market cannot just be judged by its degree of openness, but more by its balance, equilibrium, I think, between helping the economy while it's being solid and trustworthy. So based on those opening remarks, let me try to summarize how I see this opening and the internationalization of the Chinese financial market, and how I could contribute to this.
First and very quickly, let me say what is our footprint in China. In China, we operate through three main business lines, through consumer finance, through joint venture with GAC, asset management through the two joint ventures of Amundi, a longstanding one was ABC, and recent one was Bank of China.
And of course, CACIB, corporate investment bank has a license in Hong Kong that was the number five license granted back in 1898. I’m a disappointed because the number three and number four licenses were given to my two fellow panelists, HSBC and Standard Chartered. We’re a bit late, but still, it's been 125 years since we came.
Our model in China is very straightforward. First of all, we do not compete with the main Chinese banks, which we see why as partners, and our initial focus used to be to serve our international clients in their development of their setup in China. But at least in the last 10 years, we've accommodated the internationalization of our Chinese clients participating in large underwriting or cross border transactions, supporting Chinese clients through bond issuance or capital market development.
So coming back to the opening of the Chinese financial market and keeping in mind the need for a balanced evolution. How is it viewed by a specific player like us? Let me convey these three main ideas. The first, capital market, I think, is maybe the area where we have seen the most impressive transformation. And within capital markets, the most spectacular one is probably the ability to attract foreign investors and funding. And examples are numerous. When it goes to mainland stocks and bonds, main restriction has been lifted, and foreign investor now have channels in place to invest, be it the stock connect, the bond connect, or the China interbank bond market programs.
And this has translated into a steep increase of the amount of onshore Chinese securities held by foreign investors. It was roughly 2 trillion in 2014. It's now more than 7 trillion yuan beyond 6 years after. Same thing when it goes to products. I think that many products that were not available years ago are now routinely transacted. And just to name a few, we have inbound investment into non government yuan bonds, or you have panda bond issuances, of course. And on top of that, we now see the development of yuan derivatives, in particular on the back of the new loan prime rate. Of course, there is still some room for developing a profound interest rate hedging market. But it is good to see that since February 2020, China has allowed some of its biggest bank to trade on futures. For example, I'm sure that most foreign banks, and for sure CACIB, is ready to join that trial.
Second idea, I think that foreign players can further boost the growth of capital markets in China. This can first come through innovative products. For example, we have issued a panda bond with TLAC characteristic, the first of a kind by European Bank. Green and sustainable bonds also are a huge area of growth, and China is now the largest country in the world in terms of green bond issuance. It also come through I think the internationalization of the RMB, promoting bond market connectivity between China and the rest of the world, constantly bringing new issues to the market, as well as find investors to the Chinese market, and more generally, connecting the world to renminbi liquidity through swaps, FX capability, and continuous dedication to the onshore and offshore RMB market. We have worked hard those topics, and we're very proud of having been awarded the RMB House of the Year last year.
Third idea, when it goes to creating a level playing field and to foster a fair competition. I think indeed, like my fellow panelists said, a lot of things have changed, but some progress I think can still be made. The most relevant progress is certainly the fact that since April, foreign ownership limits on securities and fund management companies had been lifted by China Securities Regulatory Commission. This is a major step of financial opening. And Crédit Agricole is well placed to testify this important move, as evidenced by the very efficient validation of the RMB joint venture with Bank of China.
But the development of foreign bank is still, I think, constrained by prudential regulation. Overall, I strongly believe that we don't put the system at risk. And let me give you an example. First, we have to operate through local subsidiaries, and as such, only our local equity base is taken in consideration for the development of our activities. That concretely means that we can't lend locally more than 15% of a local equity. It means that the total risk exposure we have, for example, for a single financial institution, cannot exceed 25% of that same local equity. As a consequence, and despite our sizable group balance sheet, we can’t participate onshore to large underwriting or project finance transaction, nor can we support easily on large FX clients. Would the Chinese financial market be at risk by relaxing these constraints, for instance, by taking into account parent support? I don't think so. As most foreign banks are well capitalized globally, and local businesses are always supported by the parent company.
Second idea, I think that's also heavily constrained by very strict liquidity ratios. For example, we are capped on the offshore liquidity we can receive from the Group. Our commercial assets must be entirely funded by corporate deposit and equity is excluded. We cannot swap offshore liquidity received in foreign currency into CNY. And most foreign banks have no retail banking activities, so our resources will always be scarce and expensive, which does not allow us to play our part in the financing of the Chinese economy.
Third, I strongly believe that licensing rules could be eased. They rely mainly today on local setups and specificities. And I think they could take more in consideration the offshore trends and reputation of foreign banks, especially for areas of expertise, such as underwriting or market making, for example. So no surprise, even if those are not the only reason foreign banks are still small in China onshore, and as you said, the market shares has been declining in recent years from roughly 2.4% in 2007, to only less than 1.6% today.
The paradox is that following the COVID 19 outbreak, CBRC has requested all banks to maintain the funding to clients, notably SME, and extend the maximum help to aid the Chinese economy. And we'd love to do that and more. But this would require probably to take in consideration the liquidity ratio, the amount of liquidity support and the local capital. As you can see, and I'll conclude on that, much has been covered in recent years, and the willingness of Chinese financial authorities to further open up the market in a reasonable way is very clear, in my view. China's onshore fixed income market is now the second largest in the world, behind the US. China is the largest country in the world in terms of green bond issuance.
So the progress had been spectacular. And as the CEO of Crédit Agricole CIB, I’m proud that we have participated in and continue helping the development of this country. Thank you very much.
