Trial eyed for in­di­vid­u­als to en­gage in over­seas in­vest­ment

China Daily (Canada) - - FRONT PAGE - By ZHAO YINAN in Bei­jing zhaoy­i­nan@chi­nadaily.com.cn

China is con­sid­er­ing a pi­lot trial to al­low qual­i­fied in­di­vid­u­als to in­vest over­seas in the Shang­hai free trade zone, a step closer to scrap­ping the cap on cur­rency swaps.

A State Coun­cil ex­ec­u­tive meet­ing presided over by Pre­mier Li Ke­qiang on Wed­nes­day de­cided to study and ini­ti­ate the trial in the zone to al­low qual­i­fied do­mes­tic in­di­vid­u­als to make over­seas in­vest­ments, ac­cord­ing to a re­lease is­sued af­ter the meet­ing.

Mei Xing­bao, an ex­ter­nal su­per­vi­sor for the Bank of China, said the an­nounce­ment was long-awaited and could be seen as a step for­ward in the in­ter­na­tion­al­iza­tion of the yuan.

How­ever, the trial would be con­ducted on a small scale and have a lim­ited im­pact, Mei said.

“It will be open to res­i­dents liv­ing or work­ing in the free trade zone, so it could ben­e­fit only a hand­ful of peo­ple. But if fully im­ple­mented, it will have sig­nif­i­cant im­por­tance in the loos­en­ing of cap­i­tal con­trols in China,” Mei added.

The re­lease did not give fur­ther de­tails of the re­quire­ments for in­di­vid­ual in­vestors, but re­ports in the Shang­hai-based Se­cu­ri­ties Times have said qual­i­fied do­mes­tic in­vestors should own net as­sets of more than 1 mil­lion yuan ($157,000) and must pass a test on their financial risk-pre­pared­ness.

Mei said the scale of the trial is be­low mar­ket ex­pec­ta­tions, as other places that ap­plied to join in, such as Zhong­guan­cun, a high-tech de­vel­op­ment zone in Bei­jing, and Wen­zhou, a city in Zhe­jiang prov­ince known for its boom­ing pri­vate busi­nesses, were not in­cluded.

“The cen­tral gov­ern­ment is be­ing pru­dent in car­ry­ing out re­forms like this. There are risks of money laun­der­ing,” he said.

The China (Shang­hai) Pi­lot Free Trade Zone was set up in 2013 to

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.