Matteo Giovannini in Qingdao, Shandong Province, in May (COURTESY PHOTO)
The rise of today's China as a financial superpower might seem surprising to most observers, but the truth is the country has a very long tradition of businesses dealing with money, with so-called "counting houses" (or guifang) operating during the Tang Dynasty (618-907). Counting houses emerged during the dynasty's heyday in the 600s as places where merchants could deposit funds for protection and draft checks third parties could in turn cash for those deposits.
I came to China in 2013 to spend a year at the Dalian-based Liaoning Normal University, with the goal of making the most of my time through an intensive study of Chinese language and culture. In summer 2014, I moved to Beijing to attend an MBA program organized by the National School of Development at Peking University, with the intent of gaining a better understanding of China's growing role in global financial markets.
As part of the MBA curriculum, I traveled all across China and visited historical sites such as Xi'an in Shaanxi Province, which used to mark the ancient Silk Road's eastern end, and Pingyao in Shanxi Province, an ancient city that was the banking capital of China in the 19th and early 20th centuries. In particular, the visit to Pingyao ignited within me the desire to learn more about the birth of the modern Chinese banking industry. I learned that the country was the first nation in history to introduce paper currency (or "flying money") during the Tang, long before the first banknotes in Europe were issued in 1661 by the Bank of Stockholm.
A few months before graduation, I received an offer to join the Industrial and Commercial Bank of China, the world's largest financial institution by total assets, at its office located on Beijing's Financial Street. The area, known today as China's Wall Street and located in the capital's Xicheng District, is home to the headquarters of the People's Bank of China (the country's central bank), top regulatory bodies, the Beijing Stock Exchange, large state-owned banks, as well as major foreign financial institutions.
Having the privilege as a foreigner to be able to call Beijing's Financial Street my workplace, I am, on a daily basis, exposed to a vibrant ecosystem where business is conducted nonstop and where a high concentration of power and policymakers makes it a premium location for people working in the financial sector. The same could be said for those individuals that lived back in the Yuan, Ming and early Qing dynasties from the 13th century to the early 19th century when the area was a prosperous business district and financial center where many banks and gold shops operated.
Over the past eight years, I have been involved in cross-border transactions aimed at financing projects along the Belt and Road Initiative, a China-proposed initiative that aims to boost connectivity along and beyond the ancient Silk Road routes, meeting clients and business partners that have constantly confirmed the importance of Chinese financial institutions in promoting development, boosting economic integration, and facilitating trade cooperation.
I like to think I have received the baton from the bankers, merchants and travelers who played an active role in promoting trade along the ancient Silk Road, continuing their efforts to increase investment flows between China and the rest of the world.
But it would be an understatement to declare that China's financial sector is all about a return to past glories without mentioning future-oriented initiatives taken by government authorities. The country is currently the frontrunner in the global race for Central Bank Digital Currency issuance, thanks to high smartphone penetration rates and the popularity of payment apps, in a move that is set to replace physical cash.
In addition, the Chinese renminbi is rapidly becoming a currency of choice in trade transactions around the world, as a valid alternative to the U.S. dollar.
With 10 years of living in China under my belt, my learning experience of the country's financial sector is far from over. As China's financial market continues to open up to foreign capital, I cannot wait to see what comes next for the country's increasingly important role in global finance.
The author is an Italian finance professional at the Industrial and Commercial Bank of China
Copyedited by Elsbeth van Paridon
Comments to firstname.lastname@example.org