Qian Wu, our Climate and Sustainability partner, talks to Ginger Cheng, the chief executive officer of DBS Bank China, on the bank’s role in driving sustainable economic development of the country, what Chinese enterprises can expect when expanding globally, and how China is navigating green finance to achieve its net-zero targets.

INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

Go to series

Ginger Cheng

Many foreign organizations including some enterprises and financial institutions may have a relatively pessimistic or conservative view of China’s future development. First and foremost, foreign-invested organizations must find their own position in China.

[series intro clip]

Qian Wu

Hello everyone. Welcome to the INFocus Series by Oliver Wyman. I’m Qian Wu, partner in Oliver Wyman China. I’m responsible for the Climate Change and Sustainability practice.

Today we have invited Ms Ginger Cheng, Chief Executive Officer of DBS Bank China to join Oliver Wyman’s INFocus video series.

Our topic today is Leading New Quality Productive Force; how to go deeper into sustainable development. It’s also a great honor to be here at DBS Bank Tower today. We’d like to have a casual conversation with you. Could you first introduce yourself and also please say a few words about DBS Bank?

Ginger

First of all, I would like to welcome Ms. Wu to DBS China headquarters. I joined DBS in 2001, so this is my 23rd year here. DBS is the largest banking group in Singapore and Southeast Asia. We established our representative office in Beijing in 1993. We just celebrated our 30th anniversary in China last year.

DBS Bank’s positioning is actually quite special as well. We are an Asia-centric bank headquartered in Singapore. Over the past 30 years, we have capitalized on the opening up of China’s financial markets. We have also leveraged on the strength of our regional presence to provide our customers with the help they need to go global.

Qian

Congratulations to DBS for being in China for 30 years. I’m particularly interested in the fact that as a foreign-invested bank, you can continue to operate in China, and regardless of the fluctuations of the economy, you can still continue to invest. I believe many people are interested in this: Is “investing in China” still very attractive?

How does DBS see China’s current economic development? What are the drivers of growth for the Chinese economy? Of course, there are also a lot of challenges. How do you interpret these challenges? And how do you deal with them?

Ginger

Let’s start with some of our group’s macro views on the Chinese economy. I think the figures of the first quarter of this year have proven that China’s economic development is still, and continues to be, very dynamic. We have just recently revised our forecast for GDP for this year from 4.5% to 5%. This motivation actually comes from three aspects.

The first is due to the strong demand from the US. As such, we saw a big increase in China’s exports in the first quarter. Additionally, in the first quarter, domestic consumption and tourism driven by the holidays added a shot in the arm to our domestic demand. This year, our country has strongly advocated for new quality productive forces. Investments will be focused on some high-quality science and technology innovation. I feel that this will be a very big growth point in the future. We are still very optimistic about the development of the Chinese economy in 2024.

You’ve mentioned that many foreign organizations, including some enterprises and financial institutions, may have a relatively pessimistic or conservative view of China’s future development. Here’s what I think: first and foremost, foreign-invested organizations must find their own position in China because the Chinese market is very big. Take foreign banks as an example. The overall market share of foreign banks is actually very small, but at the same time, [for] foreign banks – especially those centered on Asia, such as DBS – we actually have a certain advantage in the region.

For example, 10 years ago, we started to support Chinese companies in the Belt and Road Initiative. In the past two years, some of China’s advanced manufacturing industries have been in the process of going global. They will first choose [to expand to] the ASEAN or Middle East region. This has brought a lot of opportunities to DBS Bank. We all know that China has the “New Trio,” which are all related to new energy and green development. I believe this is a great opportunity for our country’s high technology. I believe this will also bring a lot of opportunities to banks and financial institutions such as DBS.

I think there are a lot of opportunities. The most important thing is to find our own special positioning. We need to have a different position from other financial institutions so that we can develop better in China.

Qian

I totally agree with you. No matter what kind of business, it must find an appropriate position in the Chinese market and utilize its strengths. I think DBS has a special network in the region, and channels too, along with our financial services capabilities. We can help Chinese enterprises go global.

Objectively, after all, the external survival and business environment of enterprises is also undergoing profound changes and our trade structure is also being shattered or reshaped for now. From your point of view, what are the new challenges that Chinese enterprises are facing in the process of going global, and what kind of services can banks provide to them?

Ginger

First of all, I believe you have seen the reinvention of the supply chain. In the past few years, the reshaping of the global supply chain has been an inevitable trend. I think our Chinese enterprises must embrace this trend and build our own competitiveness and advantages in it. I believe that China is now building a business center with China as the core that extends to Southeast Asia, and also interacts with Japan and South Korea [which are] high value-added regions in the supply chain. I think this new supply chain pattern has been forming gradually.

If Chinese companies want to seize these opportunities in the future, we have to follow the trend and build up our own supply chain resilience in this area. I think every enterprise will encounter various difficulties in the process of going overseas. For example, local regulations, local political risks, labor, market access, and more. These are what Chinese companies have to face when they arrive in a new country or region.

As a financial institution, since we have deep roots in these regions, we have networks, we have local colleagues to provide banking products and services – I think we are more willing to play a consulting role to our clients in this regard to help them familiarize themselves with the local business environment and to help them survive and thrive in the local environment.

Qian

Another topic I would like to talk to you about is green and sustainable development. You must have noticed that President Xi [Jinping] put forward the goal of “carbon peaking and carbon neutrality” in 2021. There is also a push to accelerate the green financial system, green financial market, and green financial enterprise management of this kind of work, corresponding to a lot of policies and guidance issued out. We see that many domestic financial enterprises are actively preparing to strengthen their professional capacity in this area.

We know that DBS, as one of the leading banks in Asia, has been doing very well in this area too. In 2022, DBS released a white paper on net zero. Oliver Wyman also fortunately participated. I would like to discuss, as a financial company, why do banks do this? What role can financial institutions play in the development of green finance, in supporting economic transformation and sustainable economic development?

First of all, in the past few years, I feel that there have been some changes in the attitude towards green development and green finance in China. Since the beginning, of course, many large enterprises, especially central state-owned enterprises, have responded to the 30:60 decarbonization goal and they have actually taken a very good lead. Some of our domestic partners, especially the big state-owned banks, have also participated very actively.

The change in these two years is the concept of green development slowly penetrating into the capillaries, from large enterprises to medium-sized and even small enterprises. I think it’s a very good development. Going green is more than just a slogan. People must really feel that going green is in the long-term interest of our country and our business. Then there is motivation. Otherwise, it could turn into just saying: “I’m doing this just to cope with our policies or our government”. 

Actually, I think the real potential lies in transition financing. The number of companies really able to go green and get green financing is actually limited. Companies are also limited to certain industries, for example, new energy and new energy vehicles. However, there are a lot of companies that are part of a more traditional industry. They actually need funding to help them go green. This is something for which we’ve been advocating. We need to step up our efforts to do transition financing.

Qian

Yes, you’ve mentioned transition financing. It’s also a very popular topic right now. This is pretty relevant to China. Since we’re now doing net zero, it’s very challenging to get there in one step right away because of China’s energy structure, [as] we still have a lot of these fossil energy assets. It’s probably going to take a lot longer to phase out or do a transfer of assets. The banks need to take the lead or assist in the middle of the transition.

Ginger, would you please share with us some work DBS has done in relation to the Belt and Road Green Investment Principles (GIP)?  As a signatory and leader of the Transition Financing Working Group, how do we use this platform to bring together influential players in the industry?

Ginger

DBS’s global network has a 73% overlap with the Belt and Road markets. The GIP is now an important platform for sustainable development in the Belt and Road countries. We are honored to participate in this platform. On this platform, we would like to exchange information on the sustainable development of the Belt and Road, including policies, processes, concepts, and practices, through a highly internationalized platform, and learn a lot of valuable experience from it.

Qian

One last question, Ginger. How do you balance the expectations of multiple stakeholders in the enterprise between green sustainability and the fact that, as a business entity, you actually still have to bring benefits to the business. How do you achieve this balance?

Ginger

That’s a very difficult question to answer. I think it’s all about how to balance short-term and long-term interests. On the one hand, we have to take into account some short-term issues, such as regulatory requirements and shareholder returns. At the same time, we also need to do things that are beneficial to the bank and the group in the long run.

We have to make some investments. For example, we are making some investments in sustainable development, so there may be an increase in cost, but this may be more beneficial to our medium and long-term development. That’s why we have to invest in it. It’s the same thing we do for businesses. Sometimes when companies do sustainable development, there may be some short-term cost increases, there is some pressure. However, if sustainable development is an inevitable path for the country and the enterprise, and is helpful to our long-term interests, I believe it is still very worthwhile to make the investment. 

Qian

Great. I think DBS’ long-term view of corporate development is also worthy of learning for many financial companies. Thank you very much for joining us on Oliver Wyman’s INFocus series. Thank you for sharing your thoughts and insights with us, and we look forward to seeing you next time.

Ginger

Thank you, Ms Wu.

Qian Wu, our Climate and Sustainability partner, talks to Ginger Cheng, the chief executive officer of DBS Bank China, on the bank’s role in driving sustainable economic development of the country, what Chinese enterprises can expect when expanding globally, and how China is navigating green finance to achieve its net-zero targets.

INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

Go to series

Ginger Cheng

Many foreign organizations including some enterprises and financial institutions may have a relatively pessimistic or conservative view of China’s future development. First and foremost, foreign-invested organizations must find their own position in China.

[series intro clip]

Qian Wu

Hello everyone. Welcome to the INFocus Series by Oliver Wyman. I’m Qian Wu, partner in Oliver Wyman China. I’m responsible for the Climate Change and Sustainability practice.

Today we have invited Ms Ginger Cheng, Chief Executive Officer of DBS Bank China to join Oliver Wyman’s INFocus video series.

Our topic today is Leading New Quality Productive Force; how to go deeper into sustainable development. It’s also a great honor to be here at DBS Bank Tower today. We’d like to have a casual conversation with you. Could you first introduce yourself and also please say a few words about DBS Bank?

Ginger

First of all, I would like to welcome Ms. Wu to DBS China headquarters. I joined DBS in 2001, so this is my 23rd year here. DBS is the largest banking group in Singapore and Southeast Asia. We established our representative office in Beijing in 1993. We just celebrated our 30th anniversary in China last year.

DBS Bank’s positioning is actually quite special as well. We are an Asia-centric bank headquartered in Singapore. Over the past 30 years, we have capitalized on the opening up of China’s financial markets. We have also leveraged on the strength of our regional presence to provide our customers with the help they need to go global.

Qian

Congratulations to DBS for being in China for 30 years. I’m particularly interested in the fact that as a foreign-invested bank, you can continue to operate in China, and regardless of the fluctuations of the economy, you can still continue to invest. I believe many people are interested in this: Is “investing in China” still very attractive?

How does DBS see China’s current economic development? What are the drivers of growth for the Chinese economy? Of course, there are also a lot of challenges. How do you interpret these challenges? And how do you deal with them?

Ginger

Let’s start with some of our group’s macro views on the Chinese economy. I think the figures of the first quarter of this year have proven that China’s economic development is still, and continues to be, very dynamic. We have just recently revised our forecast for GDP for this year from 4.5% to 5%. This motivation actually comes from three aspects.

The first is due to the strong demand from the US. As such, we saw a big increase in China’s exports in the first quarter. Additionally, in the first quarter, domestic consumption and tourism driven by the holidays added a shot in the arm to our domestic demand. This year, our country has strongly advocated for new quality productive forces. Investments will be focused on some high-quality science and technology innovation. I feel that this will be a very big growth point in the future. We are still very optimistic about the development of the Chinese economy in 2024.

You’ve mentioned that many foreign organizations, including some enterprises and financial institutions, may have a relatively pessimistic or conservative view of China’s future development. Here’s what I think: first and foremost, foreign-invested organizations must find their own position in China because the Chinese market is very big. Take foreign banks as an example. The overall market share of foreign banks is actually very small, but at the same time, [for] foreign banks – especially those centered on Asia, such as DBS – we actually have a certain advantage in the region.

For example, 10 years ago, we started to support Chinese companies in the Belt and Road Initiative. In the past two years, some of China’s advanced manufacturing industries have been in the process of going global. They will first choose [to expand to] the ASEAN or Middle East region. This has brought a lot of opportunities to DBS Bank. We all know that China has the “New Trio,” which are all related to new energy and green development. I believe this is a great opportunity for our country’s high technology. I believe this will also bring a lot of opportunities to banks and financial institutions such as DBS.

I think there are a lot of opportunities. The most important thing is to find our own special positioning. We need to have a different position from other financial institutions so that we can develop better in China.

Qian

I totally agree with you. No matter what kind of business, it must find an appropriate position in the Chinese market and utilize its strengths. I think DBS has a special network in the region, and channels too, along with our financial services capabilities. We can help Chinese enterprises go global.

Objectively, after all, the external survival and business environment of enterprises is also undergoing profound changes and our trade structure is also being shattered or reshaped for now. From your point of view, what are the new challenges that Chinese enterprises are facing in the process of going global, and what kind of services can banks provide to them?

Ginger

First of all, I believe you have seen the reinvention of the supply chain. In the past few years, the reshaping of the global supply chain has been an inevitable trend. I think our Chinese enterprises must embrace this trend and build our own competitiveness and advantages in it. I believe that China is now building a business center with China as the core that extends to Southeast Asia, and also interacts with Japan and South Korea [which are] high value-added regions in the supply chain. I think this new supply chain pattern has been forming gradually.

If Chinese companies want to seize these opportunities in the future, we have to follow the trend and build up our own supply chain resilience in this area. I think every enterprise will encounter various difficulties in the process of going overseas. For example, local regulations, local political risks, labor, market access, and more. These are what Chinese companies have to face when they arrive in a new country or region.

As a financial institution, since we have deep roots in these regions, we have networks, we have local colleagues to provide banking products and services – I think we are more willing to play a consulting role to our clients in this regard to help them familiarize themselves with the local business environment and to help them survive and thrive in the local environment.

Qian

Another topic I would like to talk to you about is green and sustainable development. You must have noticed that President Xi [Jinping] put forward the goal of “carbon peaking and carbon neutrality” in 2021. There is also a push to accelerate the green financial system, green financial market, and green financial enterprise management of this kind of work, corresponding to a lot of policies and guidance issued out. We see that many domestic financial enterprises are actively preparing to strengthen their professional capacity in this area.

We know that DBS, as one of the leading banks in Asia, has been doing very well in this area too. In 2022, DBS released a white paper on net zero. Oliver Wyman also fortunately participated. I would like to discuss, as a financial company, why do banks do this? What role can financial institutions play in the development of green finance, in supporting economic transformation and sustainable economic development?

First of all, in the past few years, I feel that there have been some changes in the attitude towards green development and green finance in China. Since the beginning, of course, many large enterprises, especially central state-owned enterprises, have responded to the 30:60 decarbonization goal and they have actually taken a very good lead. Some of our domestic partners, especially the big state-owned banks, have also participated very actively.

The change in these two years is the concept of green development slowly penetrating into the capillaries, from large enterprises to medium-sized and even small enterprises. I think it’s a very good development. Going green is more than just a slogan. People must really feel that going green is in the long-term interest of our country and our business. Then there is motivation. Otherwise, it could turn into just saying: “I’m doing this just to cope with our policies or our government”. 

Actually, I think the real potential lies in transition financing. The number of companies really able to go green and get green financing is actually limited. Companies are also limited to certain industries, for example, new energy and new energy vehicles. However, there are a lot of companies that are part of a more traditional industry. They actually need funding to help them go green. This is something for which we’ve been advocating. We need to step up our efforts to do transition financing.

Qian

Yes, you’ve mentioned transition financing. It’s also a very popular topic right now. This is pretty relevant to China. Since we’re now doing net zero, it’s very challenging to get there in one step right away because of China’s energy structure, [as] we still have a lot of these fossil energy assets. It’s probably going to take a lot longer to phase out or do a transfer of assets. The banks need to take the lead or assist in the middle of the transition.

Ginger, would you please share with us some work DBS has done in relation to the Belt and Road Green Investment Principles (GIP)?  As a signatory and leader of the Transition Financing Working Group, how do we use this platform to bring together influential players in the industry?

Ginger

DBS’s global network has a 73% overlap with the Belt and Road markets. The GIP is now an important platform for sustainable development in the Belt and Road countries. We are honored to participate in this platform. On this platform, we would like to exchange information on the sustainable development of the Belt and Road, including policies, processes, concepts, and practices, through a highly internationalized platform, and learn a lot of valuable experience from it.

Qian

One last question, Ginger. How do you balance the expectations of multiple stakeholders in the enterprise between green sustainability and the fact that, as a business entity, you actually still have to bring benefits to the business. How do you achieve this balance?

Ginger

That’s a very difficult question to answer. I think it’s all about how to balance short-term and long-term interests. On the one hand, we have to take into account some short-term issues, such as regulatory requirements and shareholder returns. At the same time, we also need to do things that are beneficial to the bank and the group in the long run.

We have to make some investments. For example, we are making some investments in sustainable development, so there may be an increase in cost, but this may be more beneficial to our medium and long-term development. That’s why we have to invest in it. It’s the same thing we do for businesses. Sometimes when companies do sustainable development, there may be some short-term cost increases, there is some pressure. However, if sustainable development is an inevitable path for the country and the enterprise, and is helpful to our long-term interests, I believe it is still very worthwhile to make the investment. 

Qian

Great. I think DBS’ long-term view of corporate development is also worthy of learning for many financial companies. Thank you very much for joining us on Oliver Wyman’s INFocus series. Thank you for sharing your thoughts and insights with us, and we look forward to seeing you next time.

Ginger

Thank you, Ms Wu.