Lingang Group: A financial gateway to Southeast Asia

Towards the southeast of Shanghai, linked to the Yangshan Deepwater Port via a 32-kilometre-long bridge, lies the Lin-gang Special Area. Launched in 2019 as an extension of the China (Shanghai) Pilot Free Trade Zone (FTZ), the tech hub is poised to play a key role in the opening of China's economy to global investors.

The special trade zone is governed by Lingang Group, a state-owned enterprise with four decades of experience in developing industrial parks. Beyond planning and building the FTZ’s infrastructure, Lingang Group looks at ways to support the growth ambitions of its resident enterprises: Newly set-up foreign companies that want to enter China, and domestic companies eyeing international expansion to key markets like ASEAN.

Enter UOB, the only foreign bank nominated by the People’s Bank of China to offer forex and cash services in the special trade zone. In 2021, UOB and Lingang Group signed a memorandum of understanding, pairing UOB’s deep ASEAN expertise with Lingang Group’s dynamic business ecosystem, solidifying an already-strong China-ASEAN connectivity.

In this episode, watch how the partnership led to a suite of innovative financial services and cross-border liquidity management solutions – including the first China-Thailand RMB cross-border cash sweeping agreement.

With comprehensive solutions tailored to clients’ needs, UOB’s “One Bank” approach connects businesses to growth opportunities in the region, and beyond.

About this series

Building Asia is a collection of business stories on CNA that examines the financial forces driving Asia’s position as an economic powerhouse.

Lingang Group – A financial gateway to Southeast Asia was first aired on 17 October 2022 under the Building Asia with UOB series. It looks at how UOB partnered with the Lingang Group to connect domestic and foreign businesses with expansion opportunities within China and ASEAN.

Transcript

Yang Jing (Chief Financial Officer, Lingang Group and Chairwoman, Lingang Overseas):
The Lin-gang Special Area encompasses an area of 873 sq km, of which 120 sq km is currently being developed.

Together with Lujiazui and the Bund, they form a trio of financial districts key to Shanghai's role as an international financial hub.

Adaline Zheng (Managing Director and Head of Wholesale Banking, UOB China):
On the one hand, we have foreign enterprises that want to enter the domestic market. On the other, we have Chinese enterprises that want to expand internationally.

In terms of trade and investment liberalisation, the Lin-gang Special Area has proven to be a very good platform.

It can become an important node for coordinated development of onshore and offshore businesses.

Yang Jing:
The Lingang Group has 40 years of experience in developing industrial parks. Being one of the main forces behind the development of the Lin-gang Special Area, the Lingang Group takes on a greater responsibility in supporting the development of the enterprises. That helps the enterprises located within the area to expand into Southeast Asia.

On the 20th of August 2021, the second anniversary of Lin-gang Special Area, we signed a comprehensive strategic cooperation agreement with UOB and over the past year, we have seen many innovative financial solutions.

Adaline Zheng:
For example, one of our clients is a Chinese SME from another province. The company has a factory in Thailand and another in China. Between Thailand and China, they wanted to have greater flexibility and ease of fund transactions.

What we did for our client was that we took away the need to set up another company outside of Thailand. Instead, they set up in Lin-gang Special Area and we created a direct cross-border cash operation between Lingang and Thailand.

This cross-border capital pool greatly reduces the client's operating costs as well as improves the efficiency in the use of funds.

Yang Jing:
Yes, this case has now become a great example for the many other enterprises in Lin-gang Special Area to adopt. We also hope to provide more of such opportunities to our enterprises so that they can take advantage of what UOB has to offer.

Yang Jing:
Here you can see the layout of Lin-gang Special Area. We hope that in future we will have more innovative collaborations with UOB to jointly provide our clients in Lin-gang Special Area with financial solutions that support their development.

Adaline Zheng:
UOB is more than a banking partner of the Lingang Group. We are also a strategic partner of the Lingang ecosystem. UOB will make full use of our extensive overseas network, especially in ASEAN given our extensive regional footprint and strong cultural knowledge, to provide our clients and the enterprises in the Lin-gang Special Area a full spectrum of cross-border financial services.

Yang Jing:
We look forward to greater cooperation in the Lin-gang Special Area.