Shanghai Free Trade Area kicks off further round of reform to build new systems ready for an open economy

On 23 November 2016, the People’s Bank of China Shanghai Branch released a trial policy that intends to improve cross-border financial services offered in the Shanghai Free Trade Area (FTA), and to support technical innovations and the real economy (New Policy). The New Policy also aims to support the formulation of a Shanghai Technical Innovation Center, and echo the national initiatives “Made in China 2025” and “Crowd Innovation and Entrepreneurship”.

The New Policy calls for action to further expand the functions of the free trade accounts that have been used in the Shanghai FTA to facilitate cross-border transactions, which include:

  • encouraging banking institutions and paying agents based in Shanghai to provide e-business players with cross-border financial services through free trade accounts
  • encouraging financial institutions to finance international trade with both domestic and foreign currencies through free trade accounts
  • encouraging private equity firms and funds in Shanghai FTA to use free trade accounts to raise funds both in and out of the FTA to finance cross-border equity investments

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