Sergio Bertasi has been the head of the Intesa Sanpaolo representative office in Beijing since 2010. In his thirty years banking sector experience, he has long been involved in the Chinese market, with a past assignment at the Hong Kong office.
Intesa Sanpaolo Group has been present in China since 1981 with a representative office in Beijing; it owns various operational holdings: a 15,59% stake in Qingdao City Commercial Bank, 100% of Yi Tsai (a wealth management company) as well as 49% of Penghua Asset Management. The Group’s activities in the country are well established and, given what CEO Carlo Messina said during the World Economic Forum, they represent an ideal basis for intensifying Intesa’s commitment on the Chinese market.
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InvestorVisa.it: How is Intesa’s work in China currently structured, both in the retail and in the financial sector?
Bertasi: The group has always pursued a strategy of steady expansion, seeking to accommodate China’s gradual evolution and opening. Therefore, besides the representative office in Beijing work to consolidate relations with the financial sector and the political institutions of the country, in 1997 we opened the Shanghai branch, operating both in local and foreign currency. This strengthened the Group ability to support groups and companies, Italian or otherwise, operating on the local market through their subsidiaries. Recently, investments in the retail (Bank of Qingdao) and wealth management sectors (Penghua AM and Yi Tsai) took advantage of the improved operating opportunities offered by the Chinese market.
What is the relationship of a banking group like Intesa Sanpaolo with the competition and with the customers within a banking system dominated by the presence of the State at all levels, from the Big Four (Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China) to the commercial banks linked to local governments?
The added value offered by our bank, when compared to Chinese ones, consists mainly in the historical wealth of knowledge of the group to which it belongs, as well as in the greater understanding of the difficulties that a European entrepreneur faces when operating in a very different market, both structurally and from a regulatory perspective. A large part of our work is to advise, inform, document, an added service that Chinese banks are struggling to provide.
Which is the prevalent clientele of Intesa?
Local companies belonging to industrial groups which are already our customers in other geographical areas, thus Italian ones mainly, but not exclusively.
When it comes to foreign investments, the latest government measures seem to aim at reducing outgoing flows. Capital control established by the authorities to avoid the excessive depreciation of the renminbi is very distant from the now solid global vocation of Chinese companies. How have these measures influenced private investors and, according to you, what developments will there be in the future, also when considering the recent economic and political changes that saw China as a protagonist?
China conserves a strong interest in expanding investments abroad, but the Government is now focusing its attention on some sectors it considers to be of more strategic importance (e.g. renewable energy, nanotechnology, agri-food), in turn discouraging other areas where it believes expanding further abroad may be inappropriate. Perhaps we can say that we are going through a phase of filtering and optimizing investments.
From 16 December 2017, new Italian measures are in place to attract foreign investment, i.e., a special entry visa and residence permit for investors. In your opinion can these measures be attractive, limitations notwithstanding, to Chinese investors, especially now that they see their chances to benefit from similar American programs (EB-5) decrease? Can the entry visa (valid, albeit with some restrictions, for the entire Schengen area), at least in part, compensate for a lower economic competitiveness?
The entry visa is certainly an important incentive, but much has yet to be done about other aspects that facilitate mutual understanding, both linguistic and cultural, which still very often represent a significant barrier to business development.
Another measure to encourage foreign investors to transfer their tax residence in Italy is the possibility of agreeing with the Italian Revenue Agency a flat rate tax of 100 thousand euros/year on income produced abroad. This is an opportunity for the richest, for those who earn a lot in their country and pay high taxes in proportion. In your opinion, can this measure be attractive, at least under the economic aspect, when we look at the Chinese tax system; or, despite the 1989 agreement between Italy and China to avoid double taxation, there are hindrances that do not make it convenient?
I do not know if China may welcome tax breaks available directly to natural persons, at this stage such a measure can successfully appeal to Chinese citizens who already have a foreign residence. It is more difficult to consider other flows.
When it comes to foreign investments, important capital transactions and risks of money laundering associated with them are par for the course. In this regard, on 20 June 2017, the Italian Financial Information Unit (FIU), the China Anti-Money Laundering Monitoring and Analysis Center (CAMLMAC) and the Financial Intelligence Unit (FIU) signed a “Memorandum of Understanding” establishing a collaboration to prevent and fight money laundering and terrorist financing. What are the main precautions taken by Intesa to prevent money laundering?
The operations currently carried out by the Shanghai branch refer exclusively to commercial transactions, after a thorough analysis of the underlying documentation and in compliance with local regulations, in addition to what has already been done in line with our group AML criteria applied also to foreign branches.