Vice Minister Liao, and leaders of the CF40. Mr. Xu has shared some very interesting comments, and this is a very important session for us to all be participating in. It's a great honor for me to be here. It's a pleasure.
Standard Chartered has been in China since 1858. That's when we opened our first branch in Shanghai. We have never left. So we've been consistently in the country, and we've been evolving along with the country and most significantly, over the past 40 years or so. This is really consistent with our brand promise, which is “Here for Good”.
And in that context, I think that the session that we're conducting here today, is just critically important, because we're talking about not only the ongoing reform and opening up of the Chinese financial system, but also the role that China plays in the world, which has become critically important as the Vice Minister and John and Noel have made clear.
China is tremendously important to the global economy today and it's also of course very important to each of our firms. And the financial system has played a critical role in terms of not only promoting the development of China, but also improving and increasing the participation of China in the global economy. And there's never been a more important time for that to happen than right now, both because of the size of the Chinese economy, and because of the underlying growth as well as the potential growth and of course, most obviously, the desperate need at this moment to have some growth engines in a world that is challenged on so many fundamental fronts. So Standard Chartered has tried very much to address the question that Mr. Xu set out quite clearly in his report, that is the challenges that foreign banks and foreign financial institutions face in China – is it driven by elements of unfairness or other structural obstacles? Or is it driven by our own failure to adapt?
And I think we can look in the mirror and honestly say, there's some of both. Mr. Xu has mentioned clearly in the report, we have clearly set out a number of areas where China has opened up, and where China has addressed some of the issues of an uneven playing field, or structural obstacles to foreign firms participating fully and actively, but also noticed and identified areas where foreign banks have been less clear about how they can adapt and adopt the standards that are necessary in an economic system of a culture which may be different than some of the other markets in which we operate.
The way that Standard Chartered has tried to address is to be as local as we can. And that has evolved, having our management team and our board meet regularly in China, meeting with Chinese officials, meeting with Chinese clients, meeting with Chinese leaders, and emphasizing at every opportunity that the role that China plays for us and in the global economy. And that's something that we will continue to do, although it’s more difficult to do right now. But sessions like the Bund Summit are a great opportunity for us to come together and explore and understand a little bit further. And I know that my colleagues will be watching this panel with great interest to see what we can learn about how we can continue to address the challenges that foreigners have when operating in China, either challenges of our own making, or issues around the obstacles that exist.
So maybe just take a step back, since President Xi made his very, very clear set of opening up statements at the Boao Forum back in 2018, a tremendous amount has been done, and we've benefited from that. We’ve been extremely grateful for the opportunity to be the first foreign bank to be granted a securities fund custody license in the country, and be one of the two international banks to include in the Loan Prime Rate program. Now, we know that this comes through a lot of hard work and determination from the Chinese regulators and others in the Chinese leadership. These are things that help us to understand and become more local. And, of course, to bring some of the expertise that we have into the Chinese market.
Great, great progress has been made. More broadly, as Noel and John both specifically have mentioned, the importance of Chinese inclusion in the global government bond indices. This has obviously led to a massive inflow of capital into China. And as both have also said, we're just beginning, and the market share of foreign investors in the Chinese domestic market is quite small. And we know that that will increase in the years to come.
To see that Shanghai has been ranked No.3 in the International Financial Center Index is also very encouraging, and it reflects the good hard work that China has done. These are all things that we would like to continue to participate in every way.
When we look at some of the ideas for further opening up, I won't repeat what Noel and John have said today, but I will echo everything that they say, I think their views are completely consistent. But maybe I can add just a little bit of color from Standard Chartered’s perspective.
First, we know that there have been great strides in terms of opening up the market to foreign securities companies or for foreigners-owned securities companies, John talked about that, asset management, insurance. We know that prospectively, there are great opportunities in wealth management. From our perspective, this is important. One, because it helps us to support our international clients who are very keen to participate in the ongoing developments of the Chinese market. And that's something that we will continue to focus on. But it's also important for us to be able to serve our local clients. The Chinese client population for Standard Chartered, is amongst our most important in our group globally, because they're big, because they're outward looking, because they're very active. Because like all of us, they're learning how to deal with new markets. And we have a role to play in both. The greater the opportunities we have to participate in the local market, the better we can serve those local clients, both locally and internationally.
When we think about what would be most helpful for us from here, and I think many of the recommendations or observations made in the report, are quite straightforward. And I think we would agree with all of them. But I think it would be important to take every opportunity to continue to level the playing field. Noel talked about international consistency and regulation. We can see the clear drive towards convergence and international regulation. But there's more to go. That would certainly make it easier for foreign firms to adapt and to move into the Chinese market. But also, it's important when we are considering the qualifications of some of the Chinese subsidiaries of foreign companies, we can also consider the capabilities, the size, the infrastructure that comes from the parent companies, rather than entirely focusing on subsidiaries.
I’d like to talk about the opportunities brought by the connectivity between the Chinese market and the international markets. Shanghai and Hong Kong are increasingly important financial hubs in the world, it’s great to see the resilience of Hong Kong in this environment, but also very, very keen to see ongoing development of Shanghai as an international financial center. Programs like Stock Connect and Bond Connect, which we talked about our structural connectors. Wealth Connect will be an increasingly important connector as the opportunity for investors to participate in the Chinese market and vice versa, continue to expand.
All of these plays straight into the critical need to continue to promote the need of internationalizing the RMB, I think the actions that have been taken around QDII and the combination of QFII and RQFII are extremely encouraging. We can only underscore that we'd like that to continue.
Maybe I can just make a couple of comments on innovation. One of the great advantages of bringing foreign financial services firms into the Chinese market is to add additional elements to the innovation environment in China. We know that China is an incredibly innovative place itself, we see some of the great innovations in particular in FinTech, but also in other sectors coming out of China. But there are interesting ideas elsewhere as well. And the experience that we and others can bring from our experiences in different markets, including the mistakes that we made, the lessons that we've learned, and the way that we've helped regulators in different markets adjust the regulatory framework to the innovations which pose risk. That’s one of the questions that Vice Minister posed earlier, how we deal with the risk of these cross-border flows. It is a really interesting question to explore. But what we bring as foreigners into this market is a very clear set of experiences, together with some talent that can help to drive the innovation agenda, both in an offensive and a defensive way.
So maybe just to wrap up quickly, China is critical to the development of the global economy. We know that, and as we've said, a robust, thriving, innovative and well-connected financial system is a critical component to that economic development in China to really support the real economy. I'm extremely grateful to have this opportunity to meet with you and to share these views and I look forward to a robust discussion. Thank you.
