As the growth engine of China's third wave of economic development, Tianjin aims to build itself into a financial innovation base in the country rather than a financial center, a senior city official said yesterday.

The talk of building Tianjin into a financial hub was all the rage since the central government announced plans in 2006 to turn a swath of the city's land called Binhai New Area into a test-bed for comprehensive reforms.

"We have not talked about building our city into a financial center," said Cui Jindu, vice-mayor of Tianjin.

"Instead we are endeavoring to turn Tianjin into a financial innovation base that is fitting with its status as an economic center in North China, a shipping hub and new economic reform region," Cui said at the 18th Asian Corporate Conference yesterday.

Beijing and Shanghai have both floated their ambition to build themselves into international financial centers.

"We will follow our own path of developing the financial industry, a differentiated formula from that of Beijing and Shanghai," Cui said.

Cui said Tianjin will put financial innovation as a priority when developing its financial sector as outlined in the roadmap of Binhai New Area development plan approved by the State Council, or the country's Cabinet, in March this year.

According to the plan, the central government will grant the city rights to initiate a range of innovative financial and foreign exchange services in the Binhai New Area, an experimental zone for comprehensive reform like Shanghai's Pudong area and Shenzhen in Guangdong province before it.

"We will try to blaze new trails in financial innovation in traditional financial sectors such as banking and insurance as well as in the modern financial industry such as industry funds and private equity funds," the vice-mayor said at the sidelines of the conference.

The city is already the host of the country's first industry fund - the 20 billion yuan Bohai Industry Fund.

The city is also the home to China Bohai Bank established in 2006, the first national joint-stock commercial bank approved by the Chinese government since 1996 and also the first national commercial bank based in Tianjin.

"The city is also putting strenuous effort in development of its capital market," Cui said.

Tianjin, where China's first stock exchange opened in 1921, is in the process of launching a nationwide over the counter (OTC) stock trading market in the Binhai New Area, Cui said.

The OTC exchange will mainly deal with equity transactions of unlisted public companies, but not trust products and industrial funds in its first development stages.

"We are well on track," the vice-mayor said, but declined to put a timetable on when it will be launched.

Tianjin once proposed to establish the country's third stock exchange after the Shanghai and Shenzhen stock exchanges.

A port city one hour's drive away from Beijing, Tianjin plans to establish a financial holding company by consolidating State-owned financial assets from various institutions, said Cui, who is in charge of the financial sector of the city.

The holding company, to be named Tianjin TEDA Financial Holding Co Ltd, is expected to manage about 80 billion yuan financial assets, according to earlier media reports.

The financial conglomerate "will be officially unveiled within this year", Cui said.

The move will consolidate financial resources and help achieve better performance of previously scattered assets, Cui said earlier.

Tianjin will also carry out reform and innovation in foreign exchange management and trading, Cui said without elaborating.

(China Daily 05/30/2008 page22)