Reforms in Shanghai trade zone to start in 3 months
City's PBOC chief talks of bold steps that would be extended to other regions if trial succeeds
The mainland's central bank is expected to formally launch financial liberalisations in the new Shanghai free-trade zone in three months, with the hope of soon extending the reforms to other parts of the country if the trial run proves successful.
Zhang Xin, chief of the People's Bank of China's Shanghai branch, said bold steps had to be taken soon to implement the guidelines governing the financial sector in the zone.
"Those things that we are sure of must be implemented as soon as possible," he said in a statement published yesterday, adding that it would take about a year before the liberalisations could be copied and extended in other regions. It is the first clear-cut timeframe for liberalisations inside the much-hyped zone to be unveiled by a mainland financial regulator.
On Monday, the central bank announced detailed guidelines aimed at bolstering the development of the 29-square-kilometre free-trade zone, launched two months ago as a test bed for Premier Li Keqiang's economic reforms.
Zhang's statement reflected Beijing's determination to make the zone, the first of its kind on the mainland, a success amid mounting doubts about its prospects.
Foreign investors have responded in a lukewarm manner to plans to develop what has been dubbed a "mini-Hong Kong", since no concrete policies have been introduced since late September that could effectively aid free cross-border commodity and capital flows.
Beijing earlier announced that the yuan would become fully convertible in the zone but the central bank's guidelines showed that the liberalisations would be milder than the market expected.
Mainlanders will be allowed to set up "resident free trade accounts" inside the zone, which could enable them to freely make investments in foreign properties and equities.
Local officials said the free-trade zone would be aimed at boosting the use of yuan abroad rather than encouraging a free inflow of foreign currencies.
Expectations had been high that Beijing would allow foreign futures exchanges such as the London Metal Exchange to establish warehouses, or delivery points, in the zone. But regulators abandoned that plan to protect domestic futures exchanges.
It is still not known whether the securities regulator will allow the Shanghai Stock Exchange to create an international board inside the zone, where foreign corporate giants could float yuan-denominated shares.