TRADE, FI­NANCE BEN­E­FIT MOST FROM PI­LOT ZONE

China Daily (Canada) - - BUSINESS -

Trade and fi­nan­cial ser­vices are among the sec­tors that have been ben­e­fit­ing the­most so far in the China (Shang­hai) Pi­lot Free Trade Zone, an­a­lysts said in a hal­fyear re­viewofmea­sures and poli­cies for de­vel­op­ment in the zone.

Free trade ac­counts and a cap­i­tal mar­ket for for­eign in­vestors are among the itemsmost ex­pected to at­tract businesses.

Pi­lot fi­nan­cial lib­er­al­iza­tion schemes will soon in­clude a free trade ac­count and a cap­i­tal mar­ket for for­eign in­vestors, saidDai Haibo, deputy di­rec­tor of the FTZ ad­min­is­tra­tion com­mit­tee, set­ting a timetable for the launch of both the free trade ac­count and crude oil fu­tures. He­was speak­ing at a news con­fer­ence on Tues­day.

The ex­pect­ed­move will af­firm the ren­minbi as one of the leading cur­ren­cies in to­day’s rapidly evolv­ing fi­nan­cial arena. It will se­cure cheaper fund­ing for lo­cal com­pa­nies fro­moff­shore sources, ac­cord­ing to Zhang Xiaomeng, branch man­ager of Citi’s Shang­hai FTZ sub-branch.

Spe­cific rules on the free trade ac­count that al­lows full con­vert­ibil­ity of the yuan and fa­cil­i­tates off­shore fi­nanc­ing will be rolled out in the sec­ond quar­ter and tested so they can be ap­plied else­where in China by Septem­ber, which will mark the FTZ’s an­niver­sary, ac­cord­ing to­Dai.

Pro­ce­du­ral­moves by the People’sBank of China, the cen­tral bank, have al­lowed em­ploy­eeswork­ing in the FTZ to set up ac­counts for off­shore in­vest­ments, which ease re­stric­tions on money flow, pav­ing the­way for sub­stan­tial re­forms.

Ac­cord­ing toQu Hong­bin, HSBCHold­ing Plc’s chief econ­o­mist for Greater China, the na­tion has a three-pronged ap­proach to ren­minbi in­ter­na­tion­al­iza­tion: Ex­pand the cur­rency’s role in for­eign trade set­tle­ment (it has al­ready over­taken the euro to be­comesec­ond to the dol­lar), en­cour­age its use in cross-bor­der in­vest­ment and de­velop off­shore ren­minbi cen­ters.

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