Pudong Bank takes first step into free-trade zone

Shanghai Pudong Development Bank looks set to spearhead a move by domestic and foreign peers to secure a foothold in Shanghai's planned free-trade zone, after yesterday announcing a plan to open a branch inside the zone.

In a filing to the Shanghai stock exchange, the lender said its board had approved the establishment of a branch in the zone, which is expected to be launched at the end of this month. It did not disclose further details, adding that the proposal was subject to regulators' approval.

The announcement signals the lender has already won support from the national and city authorities for the branch.

Shanghai is eyeing a Hong Kong-like free port as it seeks to build the mainland's first free-trade zone, where regulatory hurdles on investments and trade would be removed to create a free-market environment.

A series of financial-sector reforms are expected to be conducted in the area, which covers nearly 30 square kilometres.

"Financial reform within the zone is beneficial to accumulate experience for the nationwide financial reform and yuan internationalisation," JP Morgan economist Zhu Haibin said in a research report.