New Measures Released to Further Open Up the Shanghai Free Trade Zone
Shanghai authorities presented a series of reforms recommendations that will further open up the successful China (Shanghai) Pilot Free Trade Zone. The newly released measure are in line to the forty general guidelines that was announced in October by top leadership in hopes to strengthen financial reforms and other piloted programs in the zone. Shanghai’s deputy mayor Tu Guangshao said that the latest plans includes the further expansion of the free trade account of the zone that will allow more organizations to participate in overseas trade and investment activities especially with the countries China signed free trade agreements with.
Banks, security firms and insurance companies are being urged to make better use of the free trade account and to come up with a more innovative financial service that will attract more international business. The deputy director of the People’s Bank of China Shanghai branch Zang Xin, pledged that the bank will provide sufficient financial support for any ambitious outbound Chinese domestic company. Launched in 2014, the scope of the Shanghai free trade zone gradually expanded and in February companies in the zone was told that they are now allowed to borrow overseas without any prior consent from authorities. And that these companies are not limited to borrowing just Chinese yuan and the scale of the financing is also doubled to twice the company’s capital.
ANZ Bank China that was officially authorized to provide free trade accounts services on November said that they were able to lower financing costs for these companies and said that the zone was a milestone for deepening financial reforms, further financial innovation and control risk in China. Furthermore forty financial institutions are connected to the free trade account monitoring and management information system.
40,000 free trade accounts are opened with a total annual income fo1.83 trillion yuan and investors are already benefiting especially on the ability to transfer funds between their domestic and overseas entities via the two way cross border RMB cash pooling that allows multinationals to allocate capital between companies.