Opening Remarks by Mr Danial Mah Abdullah, Director-General of Labuan FSA at Labuan International Finance Lecture Series 2019

Opening Remarks

Mr Danial Mah Abdullah
Director-General, Labuan FSA

18th October 2019
Lazenda Hotel, Labuan

Datuk Oh Chong Peng, Chairman of Labuan FSA

Authority Members of Labuan FSA

Chairmen of Associations

Distinguished Speakers

Ladies and Gentlemen

Assalamualaikum Warahmatullahi Wabarakatuh and very good morning to everyone.

1. It is a great pleasure to welcome you this morning to the Labuan International Finance Lecture Series 2019. As you’re aware, the Lecture Series is a yearly event that serves as a platform to update the Labuan financial industry on latest regional or global developments which are of interest to the international business community of the Labuan International Business and Financial Centre (IBFC). In the past, we had invited local and international speakers to share their knowledge and experiences on various topics including the global economy, challenges in the financial landscape as well as developments and opportunities in the international business and financial centres around the world.

2. This year, for the first time, our Lecture Series is being organized by the industry players themselves. We wish to record our appreciation to China Construction Bank Corporation, Labuan Branch (CCBL) and European Credit Investment Bank Ltd (ECIB) for making today’s Lecture Series possible. This is indeed a good change and such close collaboration between Labuan FSA and the industry should continue to be nurtured going forward into the future. We look forward for such partnerships with players in our efforts to develop Labuan IBFC as well as as bringing more events into Labuan to inject more vibrancy in the island.

3. In addition, I am very pleased to note that the Lecture Series has again attracted participants from diverse backgrounds and professions, including industry practitioners, academicians and students. The Lecture series have indeed proven to be good platforms to elevate knowledge on international business, topical issues and pertinent developments. As in the past, we have engaged renowned speakers to deliver the lecture. There is another first-time for this year’s lecture series in that we have secured two prominent speakers from the East and the West to deliver their thoughts and insights in this lecture series.

4. The first speaker is from China and the other is from the United States. I will leave it to the audience to ponder on why we have selected from these countries - And no, it is definitely not to talk on the trade war between the two economic giants. But rather, to bring in diverse perspectives from both jurisdictions on the fast-changing landscape of digital technologies globally and regionally as well as the diverse business opportunities in the thriving China market. This is very relevant to us, considering the strategic posture of Labuan IBFC to tap on the many business potentials that the China market has to offer.

5. Indeed, "Reinforcing the China Connection" is aptly chosen as the theme for today’s Lecture Series today. Malaysia has historically been an essential port of call even during the ancient Silk Road era, given its location in Asia. The 45 years of China-Malaysia diplomatic relationship has manifested into strong business ties with trade volume of US$108.6bil (RM455.8bil) as at December 2018, which is equivalent to 20% of the total trade between China and the ASEAN countries.

6. For Labuan specifically, it is home to more than 300 companies hailing from China conducting their business in the region. The two largest banks in the world - China Construction Bank and Industrial and Commercial Bank of China Limited as well as the leasing arm of Ping An and China Aircraft Leasing Group Holdings Limited are domiciled in Labuan IBFC. Certainly, given the current global dynamics, such as international substance requirements, Labuan IBFC is seeing more Chinese companies and institutions preferring to use Labuan as a domicile. In view of this favourable uptake, Labuan IBFC is expanding its reach into the China market, through the offer of its unique value propositions and by leveraging on Chinese financial institutions and intermediaries to tap on the huge market in China.

7. Our China market strategy is also in line with the recent budget announcement by the government to make Malaysia the preferred destination for foreign investments particularly from China. Labuan IBFC can play its facilitative role in the routing of such investments into Malaysia.

8. It is however in the area of fintech and digital financial services that Labuan IBFC is currently focusing on. Indeed, Labuan IBFC is seeing strong positive business trending with many digital-based financial institutions choosing the Centre to operate their regional business from. Labuan FSA has put in place the regulatory nodes to facilitate various digital financial-related business including digital-banking, insurance, digital assets broking, and tokenization in Labuan IBFC. In 2019 alone, Labuan FSA has approved 25 FinTech related businesses including digital asset exchange and trading platforms, utility and asset-backed tokens, e-wallet as well as insuretech.

9. And we all know that China is at the forefront of the FinTech phenomenonal growth in the region, and this is where Labuan IBFC can reinforce the China Connection to further grow the digital market especially in the ASEAN landscape. Labuan first digital banking approval which is also the first in the country, was given to China Construction Bank and we hope to see more of such institutions in building the digital financial services ecosystem in Labuan IBFC.

10. We will learn more of these propositions in digital financial market and the opportunities of China from our two speakers today. Now at this juncture, allow me to cite some credentials of our esteemed speakers.

11. Our first speaker is:

i. Professor Charles Harry Fine, Chrysler LGO Professor of Management of MIT Sloan School and Dean and President of Asia School of Business. He is the founding President and Dean of Asia School of Business in Kuala Lumpur, a collaboration between MIT Sloan School and Bank Negara Malaysia. He was a founding co-director of both MIT’s Communications Future Programme and the Tata Centre for Technology and Design in MIT. For over 30 years, Professor Fine has taught at MIT Sloan courses in Operations Strategy, Supply Chain Management, Quality Management and Innovation.

The second speaker:

ii. Professor Chen Bingcai from Chinese Academy of Governance Department of Economics, The Central Party School of the People’s Republic of China. Professor Cheng was the former deputy director and researcher of the Strategy Consulting Department of the National School of Administration. He graduated from the Chinese Academy of Social Sciences in 1987 and has served in the Macroeconomic Research Institute of the National Development and Reform Commission. He won several awards including the Sun Yefang Economic Science Award twice and several provincial and ministerial awards. He has published papers about "International Financial Trends and China's Financial Open Strategy", "Moral Economics", "The Theory and Practice of Balance of Payments", related to China's economic imbalances and other monographs. He also co-authored more than 300 papers on foreign exchange reserves, exchange rates, macroeconomics and international finance.

12. After the delivery by the speakers, there will be a panel discussion session on the topics espoused by the speakers. The three panellists are:

i. Mr. Gopal Kiran, ASEAN FinTech leader, Business Advisory of Ernst & Young;

ii. Mr. Gavin Lim, Director, HWGG Capital; and

iii. Mr. Steven Wong, Chief Operating and Financial Strategist, China Construction Bank Corporation;
The panel discussion will be moderated by Farah Jaafar, CEO of Labuan IBFC Inc.

Ladies and gentlemen,

13. On that note, I would like to once again thank China Construction Bank and European Credit Investment Bank, the speakers Professor Charles Harry Fine and Professor Chen Bingcai and the panellists for making this year’s Lecture series possible. I trust we will certainly learn a lot today and use this knowledge in our ventures in the China market. Without further ado, I would like to invite Professor Charles Harry Fine to deliver his lecture on “Sourcing and Developing FinTech Solutions: Risks and Opportunities in China”.

I wish you all for an informative lecture and engaging discussion today.

Thank you.

Mr Danial Mah Abdullah
Director-General, Labuan FSA
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