Shanghai mayor pledges to speed up financial reforms in free-trade zone

Shanghai's mayor promised yesterday to speed up development of the mainland's first free-trade zone (FTZ) a year after it opened, as a chorus of foreign companies expressed disappointment over the pace of pledged reforms.

The FTZ was set up in Shanghai last year with the promise of a range of financial reforms, including full convertibility of the yuan, which remain unfulfilled.

Mayor Yang Xiong said the government would work towards making the yuan - also known as renminbi (RMB) - freely convertible, among other financial liberalisation plans for the FTZ, but gave no timetable.

"We will gradually put in place an institutional and regulatory framework to enable the convertibility of the RMB under the capital account … so that the financial sector can better serve the real economy," he told business leaders in a speech.

The central government keeps a tight grip on its currency, fearing unpredictable inflows or outflows of funds could harm the economy and reduce its control over it.

Yang said the municipal government would also offer a revised "negative list" of what was barred in the FTZ for next year, following criticism that the two previous lists were too long.