Banks rush to open branches before Shanghai free-trade zone anniversary
More branches, including first privately owned bank, set to open in Shanghai free-trade zone
The Shanghai free-trade zone, the mainland's first such economic experiment modelled on Hong Kong's free port system, is set to see a wave of new bank openings before its first anniversary, including the first privately owned bank.
Sources familiar with the situation told the South China Morning Post that a newly established bank mainly funded by the Juneyao Group and other private investors would be launched in the free-trade zone in the next few months.
Juneyao is a major Shanghai-based privately owned industrial group. It has already begun hiring before the launch, said the sources.
In March, the central government gave new licences to five soon-to-be-launched privately owned banks, including Juneyao, in what was seen as a policy breakthrough.
The Shanghai free-trade zone, personally backed by Premier Li Keqiang, is regarded as a key experiment in the central government's economic reform effort, encouraging private sector investment and paring back restrictions on the international use of the yuan currency.
Li and other senior officials are expected to attend the first year anniversary celebration of the free-trade zone in October.
Besides Juneyao, China Citic Bank, a mid-sized state-owned bank, is also in the last stage of preparation to launch its new branch in the free-trade zone. Beijing-based Minsheng Bank and Singapore's United Overseas Bank have both recently received approvals to set up branches as well and are busy hiring employees.
There are about a dozen banks which opened their branches in the zone. Many have quietly complained about the lack of business due partly to confusing local regulations and sometimes weak coordination across different official departments.
To get approval to open a bank branch in the zone is just the first step. Afterwards, banks still need to apply for specific business approvals, for example, to allow the branches of foreign banks to help their clients open special onshore and offshore trade accounts and how to make money transfers between different accounts.
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