Shanghai banks ready for Free Trade Zone
Updated: 2013-09-05 09:53
As cross border business becomes increasingly important to China, the upcoming Shanghai free trade zone, is poised to see a flurry of changes to financial policies, and financial services. The Free Trade Zone is expected to be launched on the 27th of this month. A move aimed to make Shanghai a leading international financial center.
China's financial markets are poised to make a giant leap.
Once the Shanghai free trade zone is in full swing.
Financial reforms are expected to be deepened as the Free Trade Zone revs up activity. Both interest rates and the exchange rate are expected to become more flexible.
"We are expected to see more reforms in the capital account to allow freer flow of funds into the free trade zone. The exchange rate should be decided by the market. I think without reforms, the free trade zone will be negatively impacted." Lian Ping, Chief Economist of Bank of Communmications said.
Industry insiders expect a gradual relaxation in the capital account, and eventually realise full convertibility step by step.
"The gradual opening of capital account is most important. If capital could not flow in and out, it would be very difficult." Wang Xinkui, Director, Advisory Department of Shanghai Municipality Government said.
China's big five banks have all set up branches in the free trade zone, but some of them are about to raise their administration level to speed up procedures.
"We want to set up a branch which has the same administration power as our Shanghai branch. This would fast track headquarter's orders to the local branch. Once new businesses occur in the Free Trade Zone we can pass the information directly to HQ." Yi Guangcheng, Vice President of Shanghai Pudong Development Bank said.
The FTZ is also planning to open its doors to foreign and private banks. While competition is heating up, services options will become even more abundant for individuals as well as companies.