Cross-border finance can pave path to progress
With China unveiling the theme "Building an Asia-Pacific Community to Prosper Together" for APEC 2026, the spotlight is on three keywords: openness, innovation and cooperation. At a time of deep uncertainty in the global economy, this is more than a positive message from the host economy. It points to a practical direction for the Asia-Pacific and beyond to pursue a steady economic recovery.
The global economy is going through a difficult period. Protectionism and deglobalization are gaining momentum. Policies aimed at "decoupling" and "de-risking" are disrupting trade, fragmenting supply chains and eroding the trust that underpins cross-border commerce.
At the same time, many major economies are facing slower growth. High interest rates, weak demand and geoeconomic tensions are all weighing on the real economy. The ongoing conflict in Iran is having far-reaching and tangible impacts on countries in Asia and Europe, further complicating the global economic landscape.
In this context, the Asia-Pacific matters more than ever. As a major engine of global growth, the region will play a decisive role not only in shaping its own future, but also in determining whether the wider global economy can regain stability and momentum.
But if openness, innovation and cooperation are to become a reality, regional collaboration must move beyond debates over trade rules and into the daily workings of the real economy. That is where finance has a critical role to play.
Through stronger supply chain finance, more efficient cross-border financing and deeper green investment, the Asia-Pacific can support businesses, stabilize industrial networks and create new drivers of long-term growth.
The first priority is supply chain finance. The Asia-Pacific's economic vitality rests on dense and deeply interconnected industry and supply chains built over decades.
Yet these networks are now under pressure. As trade frictions rise and financing conditions tighten, small and medium-sized enterprises are often the first to feel the strain.
They sit at key points in the supply chain, but usually have weaker access to credit. Once some of these enterprises are forced to slow down or shut down because of cash-flow problems, the effects can quickly spread across the wider industrial ecosystem.
This is why cross-border supply chain finance is so important. Financial institutions and regional cooperation platforms should use digital tools to improve connectivity, increase transparency and extend financing to smaller firms across borders.
By relying on the credit strength of core enterprises and passing that support along the supply chain, such mechanisms can reduce information gaps, lower financing costs and keep goods and orders moving. In a period of uncertainty, this is one of the most direct and practical ways to strengthen regional economic resilience.
The second priority is cross-border financing for innovation. No economy can remain technologically competitive by isolating itself from global networks.
If the Asia-Pacific wants to move up the value chain and achieve high-quality growth, it must foster a stronger regional innovation ecosystem. But innovation is costly, risky and long-term. It needs not just capital, but patient capital.
That makes financial connectivity essential. When growth slows, the resources of any single economy can become constrained.
Deeper financial cooperation can help overcome those limits. Asia-Pacific economies should explore more open and flexible cross-border financing channels, including larger regional bond markets and smoother capital flows for venture capital and private equity. This would help channel long-term funds into sectors such as artificial intelligence, the digital economy and biomedicine.
Cross-border financing is not only about moving money. It also helps technology, talent and management expertise circulate more effectively across borders. Innovation hubs such as Shenzhen in Guangdong province can serve as bridges linking capital with promising firms and projects across the region.
When innovative businesses can access broader financial resources, regional collaboration becomes easier and the chances of technological breakthroughs rise. Over time, this can create a virtuous cycle in which finance supports innovation, and innovation supports growth.
The third priority is green investment. Shared prosperity is not only about expanding output. It is also about improving the quality of development.
As a global manufacturing center, the Asia-Pacific faces the dual task of sustaining growth while advancing low-carbon transformation. That makes green development central to the region's future.
Here again, finance can be a practical driver. Greater cooperation in green credit, green bonds and ESG investment funds can support the low-carbon transition of the real economy. At the same time, the region should work toward more coordinated and mutually recognized green finance standards, so that capital can move more efficiently into sustainable projects across borders.
Cross-border green investment can help developed and developing economies complement each other more effectively in financing energy transition and building green infrastructure. It can create new sources of growth while strengthening the long-term sustainability of the regional economy.
The broader point is clear. If the Asia-Pacific wants shared prosperity to be more than an aspiration, cooperation must be built on practical mechanisms.
Finance is one of the most important among them. Used well, it can stabilize supply chains, support innovation and expand the space for green development.
The author is the director of the Shanghai Institution for Finance & Development.
The views don't necessarily represent those of China Daily.
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