Ye Chun: Pioneer in exploring overseas financial markets

Editor's note: Globalization has opened up a world of opportunities for both Chinese and foreign companies. China Daily will bring out a series of stories sharing the global companies' visions and strategies during a teatime chat with top executives.

Ye Chun exemplifies the entrepreneurial spirit of merchants in Zhejiang province, hailing as he does from the historic port city of Ningbo, a cradle of commerce and trade.

With more than two decades of experience in foreign exchange management and a deep understanding of global markets, the 56-year-old Ye, who heads the Los Angeles branch of China International Trust Investment Corp, has navigated the complexities of China's evolving financial landscape.

From his early days at the State Administration of Foreign Exchange to his current business leadership role in the United States, Ye's journey has been one of transformation and resilience.

After graduating from Renmin University of China in 1996 with a master's degree in economics, Ye began his career at the SAFE, where he worked in the capital account management department until 2001, specializing in foreign debt management.

The transformative period from the 1990s to the early 2000s brought about significant changes in China's foreign exchange-management regulations and policies.

"I was actively involved in this transformation, and the experience laid a solid foundation for my subsequent career in international foreign exchange," Ye told China Daily.

In 2001, Ye transitioned from SAFE to CITIC Bank and took responsibility for foreign exchange management and trade financing.

"At that time, China was in the midst of joining the WTO and undergoing significant reforms to open up to the global market. I was fortunate to transition from being a policymaker to becoming a hands-on practitioner in the field," Ye said.

Founded in 1987, CITIC Bank was one of the earliest emerging commercial banks established during China's reform and opening-up period. It became the first commercial bank in China to participate in both domestic and international financial markets. As early as the 1980s, CITIC Bank expanded its presence by establishing branches in New York and Los Angeles to assist Chinese enterprises engaged in cross-border trade.

In 2012, Ye transitioned again from CITIC Bank's Hong Kong head office to its US branch in Los Angeles. Having navigated three distinct markets — the Chinese mainland, Hong Kong and the United States — Ye gathered a deep understanding of each business environment.

"Each market has a very different regulatory system and market structure," he noted.

One of the major challenges faced by CITIC's Los Angeles branch then was its small scale and limited risk resilience. Expanding the branch's size and revenue became his focus.

Adding to the challenge were US regulations regarding foreign banks. Branches that entered the US market after 1992 were not granted Federal Deposit Insurance Corp membership, which provides deposit insurance for amounts up to $250,000.

Without the insurance mechanism, foreign banks were unable to offer private banking services, prompting them to seek and expand into alternative customer segments.

"Banks naturally follow their customers," Ye asserted.

As China's reform and development advanced, more Chinese State-owned and private enterprises began investing in international markets. Between 1979 and 2000, large Chinese State-owned enterprises were authorized to invest primarily in the US market.

After 2000, a growing number of private enterprises and small to medium-sized businesses also began investing in the US. With the internationalization of the renminbi post-2010, a wider array of companies entered the US market, which boosted Chinese-funded commercial banks in the US.

Local American banks often had limited experience dealing with Chinese enterprises, making it difficult for them to assess creditworthiness and provide the necessary services. Consequently, new Chinese enterprises faced challenges in opening accounts, making remittances and obtaining loans.

"Chinese-funded banks became a crucial source of investment and financing for these enterprises as they expanded their operations overseas," Ye said.

He mentioned Synear Foods, a Chinese frozen-food company that in 2013 purchased a production line in Los Angeles to produce dumplings for the North American market. When Synear sought a loan from local US banks, they faced challenges due to a lack of credit history, making it difficult to secure a mortgage.

As CITIC Bank had been working with Synear for more than a decade in China, it was able to swiftly provide a $30 million loan to facilitate the purchase and registration of the production line in Los Angeles.

After establishing its US subsidiary in 2015, the company began production and used the base to supply American and European markets.

"Banking is a people's business, influenced by regional, ethnic and cultural differences. This is why, as a foreign bank, we still have room to survive and develop in the US.Similarly, due to the demands of Sino-US trade exchanges, foreign banks have ample opportunities to operate and grow in China," Ye said.

Over the past decade, CITIC Bank's Los Angeles branch has assisted nearly 30 Chinese-funded or Chinese-owned enterprises, providing loans in excess of $300 million across industries, including food, hospitality, real estate and more.

"Banks follow their customers, and multinational banks naturally follow multinational companies as they expand globally. Many of these Chinese enterprises have ventured abroad with globalization, and as a result, Chinese-funded banks must also globalize and establish an international presence," Ye said.

Different markets have varying regulatory requirements, so international expansion must be strategic. It is crucial to ensure survival and growth quickly while minimizing risks, particularly policy-related risks, according to Ye.

"The most important thing is that we must first comply fully with the policies and regulations of the host country," Ye said. "We emphasize the importance of understanding and respecting different cultural backgrounds."

By mainly supporting Chinese enterprises in their global expansion, the bank helps them comply with US laws and regulations while providing tailored financial products.

"To achieve this, our team must possess cross-border market thinking and the ability to design innovative financial solutions," explained Ye.

As president of the China General Chamber of Commerce in Los Angeles, Ye also plays a major role in facilitating communication between the chamber and its member companies. Amid the current climate of US-China relations, however, members of CGCC in the US are facing significant challenges, Ye said.

"The business environment in the US has shifted dramatically since 2018, when the US-China trade war was initiated by the Donald Trump administration. The impact of the pandemic, increasing tariffs and rising import and export costs have further exacerbated these challenges," Ye said.

The organization maintains strong relationships with the Los Angeles city government and the California state government. In May, CGCC members actively participated in the China-California Forum in Los Angeles.

renali@chinadailyusa.com