To accelerate the development of the financial sector and foster clusters of capable financial institutions, the Qingdao Free Trade Zone (FTZ) recently issued a series of policy measures, including the “Guidelines for High-Quality Development of Modern Financial Services”, the “FTZ-Assisted Loan Implementation Plan (2025 Revision)”, and the “Measures to Support Cross-Border Settlement Business”, aiming to strengthen support for the real economy.

The Guidelines for High-Quality Development of Modern Financial Services provide targeted incentives for financial institutions operating in the Qingdao FTZ:

• New Entrants: Licensed financial institutions opening operations in the zone for the first time are eligible for subsidies of 2% of their paid-in capital, up to RMB 100 million. Branches of financial institutions can receive subsidies up to RMB 5 million, based on type and scale.

• Specialized Institutions: The policy encourages establishing institutions focused on technology finance, international business, and green finance, as well as headquarters-level maritime insurance centers, shipping insurance centers, specialized departments, and innovation labs.

• Insurance and Trade Support: The guidelines also support the development of marine insurance, domestic trade credit insurance, and cross-border e-commerce cargo insurance, with subsidies up to 50% of annual premiums (maximum RMB 20,000 per enterprise per year for each type).

These incentives aim to strengthen the financial ecosystem, attract specialized institutions, and align financial services with the Qingdao FTZ's industrial characteristics.

The FTZ-Assisted Loan Program (2025 Revision) introduces a RMB 200 million fund pool, with allocations for interest subsidies, guarantees, and risk compensation:

• Interest Subsidy: Enterprises approved under the program can receive 50% of actual interest paid on eligible loans, with green finance foreign debt projects eligible for 80% interest subsidy. Maximum subsidy per enterprise is RMB 250,000 per year, with a total budget cap of RMB 20 million.

• Guarantee Fee Coverage: Guarantee fees for qualifying loans are reimbursed in full, with annual caps per enterprise of RMB 100,000.

• Risk Compensation: The fund covers part of principal losses on approved loans, with the proportion shared between banks, guarantee institutions, and the fund depending on loan type. Provisions ensure responsibility for losses caused by banks’ operational errors or weak risk management is not borne by the fund.

The program operates via a pre-approval platform (Qingdao Enterprise Financing Service Platform – “QingRongTong”), ensuring proper vetting of enterprises and monitoring of fund usage.

The Measures to Support Cross-Border Settlement Business incentivize enterprises to manage cross-border transactions efficiently:

• Trade Settlement Incentives:

• Enterprises with annual cross-border merchandise settlement ≥ RMB 50 million receive 0.02% of settlement amount as reward; annual increase ≥ RMB 20 million earns 0.1% of the increment.

• Enterprises with annual service trade settlement ≥ RMB 10 million receive 0.02%; annual increase ≥ RMB 5 million earns 0.1% of the increment.

• Maximum annual reward per enterprise: RMB 100,000.

• Foreign Exchange Risk Management:

• Enterprises using bank-provided FX hedging products are rewarded at 0.5 cents RMB per USD of executed hedging volume.

• Maximum annual reward per enterprise: RMB 100,000.

• Eligibility: Enterprises must have a fixed operating location, legally employed personnel, no record of violations or default, and be classified as A-level in annual foreign exchange reporting.

These measures enhance operational efficiency, reduce foreign exchange exposure, and facilitate cost-effective cross-border trade.