By Nhung Nguyen – Translated by Tan Nghia
|Banks roll out green credits for eco-friendly approach|
The Vietnamese government’s increasing support and gradual policy reform in recent years have boosted green projects in different sectors across the country.
According to Stephanie Betant, country head of Wholesale Banking at HSBC Vietnam, there is a momentum building up worldwide of environmental and climate risks being regarded and managed alongside any other financial risks – and as a result, the demand for green credit rises.
The State Bank of Vietnam (SBV) said that the country currently has 31 financial institutions involved in green credit, with total credit of more than VND285 trillion ($12.4 billion), mainly on green agriculture and renewable energy.
Eco-friendly credit and green bond issuance have received great attention as these debt instruments could promote a lower-carbon and a more resilient economy. According to SSI Research, the bond value mobilised for solar power projects climbed to VND29.9 trillion ($1.3 billion) in 2020, a 254 per cent jump on-year.
In terms of credit sources, by the end of 2020, banks had poured VND84 trillion ($3.65 billion) into renewable energies, mostly lending to solar power projects. That is because solar power is deemed a renewable energy that is stimulated for investment and development, Betant explained. Credit channelling into solar projects just accounts for 1 per cent of banks’ total outstanding loan balance.
Last November, HSBC Vietnam inked an agreement with Vietnam-based REE Corporation to provide a 7-year term loan worth nearly $28.7 million to develop a rooftop solar project. Previously, the bank signed a green credit agreement to finance Duy Tan Plastics Recycling Factory.
“Green investment, like new technologies, usually require a long payback period, a large sum of capital, and strong expertise to ensure that those projects meet all green criteria from starting point to product commercialisation,” said Betant. “While some of these projects have a longer tenure, particularly in renewable energy, the green lending framework is an expertise that is developed in addition to our existing commercial lending know-how. Internationally, and when the policies allow for it, green projects have financing that range between 8-15 years. HSBC Vietnam has recently granted a credit facility up to seven years to finance a rooftop solar project, and the tenure is longer than our current term loan offered to the client.”
Early in January, UOB Vietnam rolled out the first two green credit packages in its Smart City Sustainable Finance Framework for two Vietnamese companies, namely Steel Structure JSC (ATAD) and Phan Vu Investment JSC, as part of the bank’s dedicated financing framework to make sustainable finance more accessible.
Harry Loh, CEO of UOB Vietnam said, “The transition from non-renewable energy to renewable energy requires collaborative efforts from all relevant parties. UOB is one of the pioneers in providing green credit in Vietnam as the bank supports the transition to sustainable energy. After green credits granted to ATAD and Phan Vu, we will continue to promote the provision of green and sustainable finance to enable more businesses to thrive, while protecting the environment at the same time.”
Last year, Standard Chartered Bank also sharpened its focus on eco-friendly initiatives by joining other lenders including the Asian Development Bank, Bangkok Bank, Kasikorn Bank, Kiatnakin Bank, and Industrial and Commercial Bank of China to roll out a climate-friendly syndicated loan of $148.8 million for Phu Yen Solar Power Plant.
The project – which is expected to reduce 123,000 tonnes of CO2 per year – is considered the single largest operating solar power plant in the country and one of the largest in Southeast Asia.
The bank has continued to make great strides in financing a green agenda by aligning its goals with international practices on sustainability and joining the globe’s climate commitments.
“Our wide range of network covers the world’s largest and fastest-growing economic zones. We are committed to actively engage with our clients to influence their transition strategies as well as to foster sustainable growth across borders by a number of forthcoming sustainable financing approaches,” said Michele Wee, CEO at Standard Chartered Vietnam.
On the same note, Citibank is also targeting net-zero greenhouse gas emissions by 2030 and to make good on the promise of the Paris Agreement. The global lender is interconnected with many carbon-intensive sectors that continue to help drive global economic development. Citibank Vietnam has recently been committed to net zero by facilitating some low-carbon projects and not financing carbon-intensive projects.
“Vietnam ranks sixth among the most vulnerable countries to climate change, and at the same time, it is a fast-growing emerging economy with a real GDP growth rate of 7 per cent in 2019,” the State Securities Commission (SSC) noted. “To achieve rapid economic development, build resilience, and meet adaptation and mitigation targets, it is fundamental that not only the government but also the corporate community is aligned and well-informed about the debt instruments available and the opportunities that these issuances avail.”
In Vietnam, around 70 per cent of capital needed in the economy is being financed by the banking system. Therefore, this system will need to play an important role in the growth of the country’s green financial market.
So far, the SBV has actively participated in campaigns for a green economy. In 2015, it issued Directive No.03/CT-NHNN on promoting green credit growth and environmental and social risk management in credit granting activities. In response to this directive, several green credit campaigns have been started.
According to the SBV, by the end of June 2019, there were more than 20 credit institutions providing green loans with a lending balance of $3.8 billion, an increase of 32 per cent compared to 2018. Agriculture, renewable, and eco-friendly power projects are among the focus of the loans, accounting for 45 and 17 per cent of the total outstanding green credit, respectively.
As of October 2020, Vietnam has seen four green debt issuances totalling nearly $284 million, issued by one government-backed entity ($23.4 million in 2016), one municipal government ($3.6 million in 2016) and two green loans ($71 million and $186 million, respectively, both in 2020).
Most of the proceeds (78 per cent) have been used towards renewable energy, which remains the main sector of interest of Vietnamese stakeholders along with waste and agriculture. The confounding factors of climate change, rapid urbanisation, and strong population growth mean that Vietnam needs to prioritise more resilient and sustainable water management, as well as low-carbon transport development, cited from SSC statistics.
According to the International Finance Corporation, Vietnam’s climate-smart business investment potential amounts to an estimated $753 billion between 2016-2030, with the majority ($571 billion) going towards the country’s infrastructure needs by 2030. Potential investment in renewable energy totals $59 billion, with over half of this in solar power and another $19 billion for small hydropower projects. Meanwhile, new green buildings represent an almost $80-billion investment opportunity.
Pham Nhu Anh, head of the Corporate and Investment Banking Division at Military Bank, explained to VIR some major risks associated with the climate-friendly initiative including risks in project appraisal; balancing and meeting the capital needs for projects requirements; collateral; revenue or project efficiency; and challenges stemming from the domestic legal framework.
“Green credit has been a popular field among developed countries yet remains quite new to Vietnam. Considering the green sector as one of the inevitable trends that bring significant benefits to the society, we hope to receive guidance from regulators, the SBV, and the cooperation of credit institutions, as well as the support of customers so as to better fulfil our role in providing green credit,” Anh said.
Betant of HSBC also emphasised, “Fundamentally, green loans can be of any type of loan instrument and they have the same credit risks in comparison. A bank should consider a corporate risk profile as a whole and specific related green project when assessing green credit. In addition, the green element must be clearly designated, following The Green Loan Principles.”
Betant added that it does not mean that HSBC is trying to provide as many green credits as possible. Instead, it tries to raise the bar in selecting projects to finance and strive to look for green ones. “Applying for a green loan with HSBC, besides satisfying the requirements to become HSBC’s corporate clients, a green project needs to go through our strict credit approval and management process of sustainable financing controlled by the HSBC Asia-Pacific Sustainable Loans Committee – the dedicated body of the bank, with rich experience in successfully arranging green financing in different fields right around the world,” she added.
By Luu Huong
|Jonathan Ostry, deputy director of the International Monetary Fund’s Asia and Pacific Department|
The Vietnamese economy grew 2.91 per cent in 2020 and 4.48 per cent in the first quarter of 2021. How does the International Monetary Fund (IMF) view the economy in its use of fiscal monetary policy and other tools, and what are the IMF’s recommendations for the country to achieve set growth targets?
Vietnam performed much better than virtually all of the countries in our region last year, a rare positive growth number in a sea of negatives. And this was due mainly to the incredibly proactive and effective set of containment policies introduced very early in 2020, and really showed what can be achieved with a strong health response.
And it sorts of manifests itself in a strong pickup in growth. The fact that prolonged lockdowns were not needed, so reopening could proceed much faster than elsewhere. And when, inevitably, one or two localised outbreaks occurred, the authorities were vigorous in attending to those and did so very effectively. And there was a payoff also in that macroeconomic policy support on a huge scale was not needed in Vietnam. So again, it is a situation where the investment in a strong healthcare response repays itself many times over.
Now, for 2021, the IMF is projecting very healthy growth in Vietnam, I think on the order of 6 or 7 per cent. The message that we have is to make sure that you are continuing to support those who are vulnerable in your economy, as you have been doing, and continue with the vaccine rollout which has just started in Vietnam, and is, hopefully, going to be accelerated very, very quickly.
There is also the need to lay the foundation for strong medium-term growth, including making sure you have the tax and revenue resources to build your infrastructure and build public investment, ensure your financial system is resilient, and continue with efforts to build the pro private investment environment in Vietnam on a structural basis, which will also have a payoff in terms of reducing external imbalances and the strength of the external position in Vietnam.
In a bid to spur economic growth, the government is mulling over a new plan to assist enterprises during the pandemic. What types of solutions should be taken in the plan, and will there be any risks of high inflation if the government loosens its fiscal policy?
Vietnam’s fiscal position is sound at present, supported by sustainable debt dynamics. Moreover, inflationary pressures are muted and in line with the central bank’s limit for 2021 of 4 per cent. Our recommendation remains that the fiscal stance can be loosened, if necessary, to support economic activity and limit permanent scarring from the pandemic. Much of course depends on the pace of economic recovery at the global level, which is still subject to considerable uncertainty.
As far as specific tax measures are concerned, weak uptake of tax deferrals in Vietnam, especially in the hardest-hit sectors of the economy, would argue against their extension.
Some of the measures we would instead encourage include introduction of temporary corporate income tax (CIT) loss-carry backwards to improve firms’ cash flows; better targeting of temporary CIT reductions to benefit distressed but viable small- and medium-sized enterprises; and introduction of temporary provisions for accelerated depreciation or investment tax credits to lower to user cost of capital and encourage investment.
|Vietnam is looking at stellar prospects due to its success in handling the pandemic and fast reopening, photo Le Toan|
How does the IMF assess the quality of Vietnam’s economic growth, and how is the quality related to the capacity of the country in attracting foreign direct investment?
Vietnam’s growth story over the last three decades has been remarkable as it is one of sustained and inclusive growth that has boosted the living standards of its population. Thanks to market-oriented reforms which strengthened the business environment and helped attract significant foreign investment, Vietnam has moved from being one of the poorest countries in the world to achieving lower middle-income status.
To remain competitive regionally and globally, we would advise taking steps to further improve the business environment and ensure a level playing field. This includes reforms geared towards simplifying and reducing the regulatory burden faced by domestic private firms, easing the entry and exit costs for formal firms, continued reform of state-owned enterprises, and enhancing good governance.
Reducing labour skill-mismatches along with increasing human capital and technology access would also boost labour productivity, facilitating investments into more complex products that can better withstand international competition.
The IMF Executive Board’s conclusion of Article IV in consultation with Vietnam, March 2021
Executive directors noted that the COVID-19 pandemic disrupted a prolonged period of high growth and improvements in living standards. They commended the authorities for their decisive and comprehensive response to the pandemic, which, supported by strong fundamentals and policy buffers, has been instrumental in ensuring the economy’s resilience.
They noted that risks to the outlook are tilted to the downside and stressed the need for measures to limit permanent scarring and promote sustained, inclusive, and greener growth.
The directors underscored the need for fiscal measures geared towards protecting workers and vulnerable households, including through improved budgetary execution and enhanced targeting. They stressed that once the recovery is firmly underway, gradual fiscal adjustment should center on revenue mobilisation to help create space for priority social and infrastructure spending and support greener and more inclusive growth. Directors noted the need for continued efforts to upgrade fiscal policy frameworks to safeguard fiscal sustainability.
Recommended was the maintaining of an accommodative monetary policy stance, while remaining mindful of underlying banking sector vulnerabilities. They emphasised that corporate support for viable firms should be gradually phased out and regulatory forbearance normalised.
Directors underscored that financial risks should be closely monitored and problem loans addressed in a timely manner. Medium term objectives include enhancing private debt restructuring frameworks and further strengthening banks’ capital position in the context of adopting Basel II requirements.
Noting the staff’s assessment that Vietnam’s external position was substantially stronger than warranted by fundamentals and desirable policies, directors called for steadfast reform efforts to remove the remaining barriers to private investment and enhance social safety nets. At the same time, some directors urged caution in interpreting EBA (External Balance Assessment) model results, which may not adequately capture Vietnam-specific structural factors and measurement issues.
In the context of reserve adequacy, directors welcomed efforts to allow greater two-way exchange rate flexibility and modernise the monetary policy framework, which would help the economy to adjust to the changing external environment.
They also stressed the importance of structural reforms to improve the business environment, enhance productivity, and boost post-pandemic potential growth. They concurred that priority should be given to reducing labour skill-mismatches, promoting digital transformation, and ensuring a level playing field, particularly for small- and medium-sized enterprises. Directors welcomed continued efforts to improve economic institutions and strengthen governance.
⃰ Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
By Thanh Tung
Jakarta (VNA) – The Asian Development Bank (ADB) has projected that the Indonesian economy will return to high growth, last seen in the pre-pandemic era, in 2022, with the economy forecast to expand 5 percent next year.
The bank also projected a 4.5-percent economic growth for Indonesia for 2021.
ADB Director for Indonesia Winfried Wicklein said on April 28 that Indonesia passed 2020 well thanks to a well-coordinated and communicated crisis response, and strong leadership in tackling the pandemic.
Indonesia would return to its growth trajectory next year, driven by a sustainable trade recovery, a revival in the manufacturing sector, and a large national economic recovery budget for 2021, he added.
Household spending in Indonesia is expected to increase in 2021 as the vaccination programme advances and more economic sectors resume operations, he elaborated.
Besides, investment is expected to increase again with improving economic prospects, while the pace of recovery in finance or credit will still lag behind considering the uncertainty in investor sentiment, he said.
According to ADB estimates, inflation, which averaged 1.6 percent last year, will rise to 2.4 percent in 2021. This inflation rate will still be within Bank Indonesia’s target range as inflationary pressures due to currency depreciation and higher food demand will be partially offset by the decline in prices of goods set by the government.
Furthermore, net exports supported by strong commodity exports will result in a current account deficit of 0.8 percent of Indonesia’s GDP in 2021, according to the ADB.
As investment increases next year and volumes of imported capital goods, such as machinery and equipment, increase, Indonesia’s current account deficit is expected to reach 1.3 percent of the GDP.
Wicklein said there are several risks to this estimate, including disruptions to the global recovery due to the threat from coronavirus mutations, uneven vaccination rates in the world, and unexpected global financial tightening.
Meanwhile at home, economic recovery could slow if there is a spike in COVID-19 cases during the month of Ramadan, or on account of delays in vaccination efforts and weakening government revenues, he added.
Therefore, ADB has recommended that Indonesia mobilise domestic resources and ensure environmentally friendly economic development./.
Positive growth thanks to effective anti-epidemic strategy
The Asian Development Outlook (ADO) report, released on April 28, states that the Vietnamese economy still grew in 2020 despite the COVID-19 pandemic and the ensuing downturn in global growth. Accordingly, the Government’s effective anti-epidemic and socio-economic development measures managed to largely insulate the economy from the COVID-19 pandemic in 2020, GDP growing by 2.9% – one of the highest growth rates in the world.
In particular, economic bright spots worthy of mention were agriculture, growing by 2.7% in 2020 from 2.0% in 2019, the sector buoyed by proactive export promotion; structural transformation (for example, shifting from rice to high-value cash crops and livestock); and a dynamic private sector. Agriculture contributed 0.4 percentage points to GDP growth last year – a strong performance given the severe floods and drought, increased salinity intrusion, and a sharp drop in external demand, reported the ADB.
Industry and construction growth moderated to 4.0% in 2020, contributing 1.4 percentage points to overall growth, as effective COVID-19 controls helped maintain a stable supply of labour.
A slowdown in private investment was compensated by a 34.5% increase in public investment, among the highest levels of public investment support in Southeast Asia. External trade performed robustly despite headwinds from COVID-19. Net exports of goods and services contributed 0.3 points to growth, with export growth of 4.4% exceeding import growth of 3.9%.
Inflation averaged 3.2% in 2020 and was only slightly higher than 2019’s 2.8%, despite an unexpected increase in pork prices in the first quarter of 2020 and severe floods in the third quarter. Subdued domestic demand and a steep fall in global fuel prices largely tamed inflation.
Exports expanded by 7.0%, boosted by multilateral and bilateral trade agreements, the country’s diversification into global value chains, and trade diversion. Exports to the US, mainly mobile phones, spare parts, and textiles, increased by 25%. China surpassed the European Union in becoming Vietnam’s second largest export market after the US. Imports increased by 3.6%, with China remaining the largest source of imports, followed by the Republic of Korea and other economies in Southeast Asia.
Another economic bright spot is that Vietnam’s stock market plunged in the first quarter of 2020, but quickly recovered as COVID-19 was brought under control and the State Bank of Vietnam implemented its rate cuts, attracting domestic investors back to the market. The VN Index hit 1,200 in the first quarter of 2021.
Processing, manufacturing and investment the main drivers of growth
ADB Country Director for Vietnam Andrew Jeffries said that stagnant domestic consumption and weak external demand caused by the COVID-19 pandemic slowed down Vietnam’s economy last year, but the growth momentum remains strong this year, made possible by Vietnam’s success in controlling the spread of the virus.
According to the ADO report, the economy is expected to grow by 6.7% in 2021 and 7.0% in 2022 – strong and steady growth made possible by Vietnam’s success in containing the COVID-19 pandemic. Vietnam’s economic growth will be boosted by export-oriented manufacturing, increased investment, and expanding trade. The growth momentum is expected to continue, thanks to ongoing reforms to improve the business environment and Vietnam’s participation in multiple free trade agreements involving almost all advanced economies.
Commenting on this growth trend, Nguyen Minh Cuong, Principal Country Economist of ADB Vietnam, said that with Vietnam’s experience in the fight against the epidemic, as well as the confidence of the people and investors, as well as a new government with the determination to return the economy to its previous levels of growth, Vietnam’s economic prospects in 2021 are very positive in the global context.
Nguyen Minh Cuong, Principal Economist of ADB Vietnam, said that Vietnam’s economic prospects in 2021 remain positive despite COVID-19.
The main growth drivers for Vietnam this year will be industry, in which processing and manufacturing associated with exports will be key. Industry is forecast to expand by 9.5% in 2021, contributing 3.5 percentage points to GDP growth. The sector got off to a strong start in the first quarter of 2021, as it grew by 6.3% from the first three months of 2020.
In addition, increased investment will also be a key driver of growth this year and next, according to the ADB Vietnam’s chief economist. Vietnam’s success in containing COVID-19 and the new Investment Law, passed in January 2021, reducing business regulations, are expected to attract further foreign investment. Registered foreign direct investment increased by 17.8% in the first quarter of 2021 from the same quarter last year. Overall investment growth will be further spurred by private investment, which has already risen substantially, stimulated by low interest rates and rising public spending.
The recovery of its major trading partners will also increase production demand for exports, in turn significantly expanding Vietnam’s trade and growth prospects. Trade will remain robust in 2021, supported by strong economic recoveries in China and the US, Vietnam’s two major trading partners, and the country’s participation in 15 major free trade agreements involving almost all advanced economies. Vietnam posted a US$2 billion merchandise trade surplus in the first quarter of 2021, with exports to China surging 24.3%, and by 32.8% to the US. Merchandise exports are forecast to rise by 8.0% this year and next.
Other positive prospects include the service sector, forecast to rebound by 6.0% in 2021, contributing 2.3 percentage points to GDP growth. The growth in services is coming from digital transformation, increased spending on COVID-19 vaccines, buoyant business sentiment, and low interest rates.
A stronger agriculture sector is expected this year with continued structural reforms, greater market access for agriculture exports under regional free trade agreements, and higher global food prices due to rising demand.
Construction is expected to pick up quickly as the government continues to accelerate major infrastructural projects in 2021 and low interest rates stimulate property development.
The purchasing managers’ index rose to 53.6 in March, its highest since January 2019. New foreign and local firms are expected to be established due to COVID-19 vaccines enabling greater mobility at home and, in the case of foreign investors, travel to Vietnam.
Private consumption is expected to recover in tandem with private investment and modest inflation. Retail sales rose 5.1% in first quarter of 2021, indicating a recovery in consumer confidence. Business sentiment is buoyant, as shown by a December 2020 survey in which 80% of respondents expect business conditions to either improve in 2021 or remain stable.
Credit growth should improve in 2021, aided by interest rate cuts in 2020 and revived credit demand from businesses.
Softening the negative impacts of COVID-19
However, the director of ADB Vietnam also said that significant risks remain this year and next, including the emergence of new coronavirus variants and the uneven global COVID-19 vaccine rollout, which could delay Vietnam’s return to its strong pre-pandemic growth path, given the country’s reliance on external trade.
Sharing the same point of view, Cuong said that the main risk for growth still arises from the COVID-19 epidemic. The renewed outbreaks indicate that it will still take time to stop the epidemic while vaccination plans are only at an early stage. In addition, the impacts of the pandemic on income and poverty are still significant. A prolonged pandemic may convert the short-term economic impacts into mid- to long-term systemic problems.
Against such a backdrop, the ADO report recommended Vietnam maintain inclusive growth by softening the pandemic’s impact on poverty and income. It urged the government to adopt a long-term sustainable strategy to help the poor and vulnerable diversify their livelihoods through measures such as vocational training and improved access to microfinance for new businesses.
To tackle the COVID-19 pandemic’s impacts on income and poverty, the government, on April 9 2020, passed Resolution 42, a social security programme equal to 0.2% of GDP (approximately US$0.5 billion) to provide cash transfers to individuals, households, and businesses. The resolution is expected to help reduce the 2020 poverty rate by 1.3 percentage points (to 4.9%), and particularly benefit households of ethnic minorities, typically in the poorest income quantile, and those in rural areas, as their incomes have tended to be those hardest hit by the pandemic. Although Resolution 42 could be highly effective in reducing poverty, the programme in itself may not be enough to lift the most vulnerable groups out of poverty.
ADB experts recommended the cash transfer programme needs to be strengthened to prevent further income losses among the poorest and most vulnerable groups. Because COVID-19’s impact on incomes has been highly heterogenous, support to those working in the most affected sectors should be prioritised.
In addition, building a comprehensive monitoring and evaluation system for current and potential social assistance beneficiaries that also includes those in the informal sector would be useful in terms of reaching those in need.
Monetary policy should be maneuvered in a flexible and active manner to ensure sustainable growth and stability of both monetary and foreign-exchange markets, said the Party chief Nguyen Phu Trong.
As a “veins” for the economy, the banking sector should continue to push for a comprehensive reform to better support the country’s process of modernization and industrialization.
|General Secretary of the Communist Party of Vietnam Nguyen Phu Trong at the ceremony. Source: VGP|
General Secretary of the Communist Party of Vietnam Nguyen Phu Trong gave the remarks at a ceremony marking 70th anniversary of Vietnam’s banking sector today [May 5].
“Priorities for the sector is to control inflation, stabilize macro-economic conditions and meet credit demand as the country continues pushing for greater socio-economic development,” said Trong, adding these tasks are of significance during the period of economic recession as a result of the Covid-19 pandemic.
The Party chief referred to the resolution of the 13th National Party Congress on the orientation for economic growth, saying the State Bank of Vietnam (SBV) should run monetary policy in a flexible and active manner along with other policies to ensure sustainable growth and stability of both monetary and foreign-exchange markets.
While the banking sector remains a major source of capital supply for the economy, Trong noted SBV’s policies would have major impacts on economic security and public order.
As the local economy is still struggling with Covid-19 impacts, Trong lauded the banks’ efforts in keeping a low-interest rate environment and timely provide capital to help enterprises recover from the current crisis.
Referring to ongoing efforts to restructure credit institutions and settle bad debts in the system, Trong called for banks to catch up with new development trends to reach regional and international levels.
“Perfecting legal framework and efficiency in operation are key to safeguard financial market stability and prevent risks in banks’ operation,” Trong continued.
|SBV’s Governor Nguyen Thi Hong|
At the event, SBV’s Governor Nguyen Thi Hong said the central bank is committed to further enhancing efficiency of monetary policy management for greater economic resilience against external shocks.
“Along with efforts to deepen international economic integration, macro-economic stability is key to enhance the country’s economic independence,” Hong stated.
Hong said the main objectives of SBV’s plan in restructuring the banking sector is to adopt international practices into banks’ operation for higher transparency and efficiency.
“In a rapidly changing world, a revised legal system for banks would promote the development of new services to better serve enterprises and people, in turn contributing to the process of national digital transformation and digital economic development,” Hong concluded.