BEIJING: China today unveiled a blueprint for its first free trade zone (FTZ) in Shanghai that will ease restrictions on the yuan, trade and investment to transform the world's second-largest economy under the new leadership.
The wide range of reforms aimed at halting the slide of the economic slowdown will start in the Communist giant's gleaming metropolis after the pilot zone is officially inaugurated, according to the plan issued by the cabinet.
China aims to lift the zone up to international standards featuring convenient investment and trade, free exchange of currencies, efficient supervision and a sound legal environment after two to three years of tests.
"Under the precondition that risk can be controlled, China will create conditions to test yuan convertibility under the capital account, market-set interest rates and cross-border use of the Chinese currency in the zone," the plan said.
The Shanghai FTZ, a pet project of Premier Li Keqiang, was expected to pose a stiff competition to international trade hub Hong Kong. It was envisaged to test how it could boost FDI and reignite the slowing down of the world's second largest economy, currently stabilising around 7.5 per cent GDP.
The FTZ will allow the market to decide prices of financial institutions' assets, or known as the securitisation of those assets, as policy-makers hope to catalyse further reforms in China through such an experiment.
It pledged to establish a foreign exchange management mechanism adaptable to trade and investment reforms in the zone, state-run Xinhua news agency reported. Enterprises can try the free cross-border financing while multinationals are encouraged to establish regional or global capital management centers in the zone.
The FTZ will also push for "a full-scale opening" of the financial service sector to eligible private capital and foreign financial institutions.
Foreign companies are permitted to gradually participate in commodities futures trading in the zone. The zone will also boast easier investment access and greater openness in trade of services, according to the plan, with 18 service sectors open to foreign and private capital from finance, shipping, commerce to culture.
indiatimes.com
The wide range of reforms aimed at halting the slide of the economic slowdown will start in the Communist giant's gleaming metropolis after the pilot zone is officially inaugurated, according to the plan issued by the cabinet.
China aims to lift the zone up to international standards featuring convenient investment and trade, free exchange of currencies, efficient supervision and a sound legal environment after two to three years of tests.
"Under the precondition that risk can be controlled, China will create conditions to test yuan convertibility under the capital account, market-set interest rates and cross-border use of the Chinese currency in the zone," the plan said.
The Shanghai FTZ, a pet project of Premier Li Keqiang, was expected to pose a stiff competition to international trade hub Hong Kong. It was envisaged to test how it could boost FDI and reignite the slowing down of the world's second largest economy, currently stabilising around 7.5 per cent GDP.
The FTZ will allow the market to decide prices of financial institutions' assets, or known as the securitisation of those assets, as policy-makers hope to catalyse further reforms in China through such an experiment.
It pledged to establish a foreign exchange management mechanism adaptable to trade and investment reforms in the zone, state-run Xinhua news agency reported. Enterprises can try the free cross-border financing while multinationals are encouraged to establish regional or global capital management centers in the zone.
The FTZ will also push for "a full-scale opening" of the financial service sector to eligible private capital and foreign financial institutions.
Foreign companies are permitted to gradually participate in commodities futures trading in the zone. The zone will also boast easier investment access and greater openness in trade of services, according to the plan, with 18 service sectors open to foreign and private capital from finance, shipping, commerce to culture.
indiatimes.com
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