Societe Generale says 'optimistic' about prospects of China's financial markets

French multinational banking group Societe Generale remains bullish about the long-term prospects of Chinese financial markets despite recent fluctuations, and will continue to serve as a bridge between China and international markets, a senior executive said.

"Having a long-term commitment to China, we are dedicated to achieving sustainable development in the country and are optimistic about the Chinese market's tremendous potential," said He Xin, Societe Generale's chief country officer for China and CEO of Societe Generale (China) Ltd, the group's wholly owned subsidiary in the country.

The remarks have come at a time of volatility in China's A-share market.

The Shanghai Composite Index touched a multi-year low on Monday, only to jump the following four days to close above the psychologically important 2,900-point level, at 2910.22 points, on Friday, buoying foreign capital inflow into Chinese equities.

"International investors still deem allocation in China as an indispensable part of their portfolios," He said.

The bank will continue to help foreign investors learn more about and invest in Chinese financial markets, he said, adding that the deepening of China's financial opening-up will help Societe Generale introduce more offshore clients and business transformation trends into the country, boosting its onshore operations.

Having been an active player in China's interbank bond market since 2009, SG China became a market maker for northbound trading of the Bond Connect program last year and is working to help align the green finance standards of China and the European Union.

China's leadership has reiterated the country's commitment to high-level financial opening-up on multiple occasions recently.

At the opening ceremony of a study session on promoting high-quality financial development on Jan 16 attended by provincial and ministerial-level officials, it was stressed that efforts should be made to expand opening-up to improve the efficiency and capacity of financial resource allocation.

With this year marking the 60th anniversary of the establishment of diplomatic ties between China and France, the senior executive said he expects closer bilateral regulatory cooperation to help bolster Societe Generale's development in China as well.

He said the bank sees great potential in China's green finance, as well as wealth and asset management markets, and is considering further plans to capitalize on the growth opportunities.

"We see vast development potential in China's wealth management market," he said, as the allocation of Chinese household wealth, which has grown significantly over the past 20 to 30 years, will gradually shift from the real estate market to financial products amid a slowdown in the real estate sector.

"Individuals in developed countries invest almost 60 percent of their savings in financial products, versus less than 20 percent in China. This means that there is huge room for both wealth management and asset management products to grow here."

Adopting a B2B2C business model in its wealth management business in China, He said Societe Generale has cooperated with Chinese banks and securities firms for wealth management product distribution while the bank itself designs the products, and is considering cooperation with fund management companies for product distribution as well.

Xiao Yuanqi, vice-minister of the National Financial Regulatory Administration, said at a new conference on Thursday that the country welcomes foreign institutions with expertise in wealth management, asset management, asset disposal, as well as climate change, green finance and sustainable operations, to conduct various forms of cooperation in China.

He Xin said Societe Generale, which has been operating in China for more than 40 years, "has adhered to the strategic priority, among others, of leveraging our group's advantages in the green energy transition to support Chinese enterprises, financial institutions, and multinationals in achieving their low-carbon objectives."

Stressing that Societe Generale would continue to deepen green finance services here, He said the bank was one of the first two foreign lenders to qualify for the carbon emission reduction facility — which provides financial institutions with low-cost funding for their loans to key areas of carbon reduction — and has facilitated the issuance of the first offshore green bonds by a Chinese private company.

Liu Zizheng contributed to this story.