The Chinese central bank has flagged support for trial opening of the capital account in Shanghai’s Lingang free trade zone.
Wang Xin (王信), head of the research department of the People’s Bank of China (PBOC), said that it would support advance trials for the free convertibility of the renminbi in Shanghai’s free trade zone, as part of broader efforts to cement the city’s status as an international finance system and further improve its financial infrastructure.
According to Wang PBOC plans to “further increase the convenience of the entry and exit of funds for trade and investment by enterprises and explore the free entry and exit and free convertibility of capital in the Lingang New District,” as well as “help Shanghai become a major hub and bridge for connecting international and domestic markets under new development circumstances.”
Wang made the remarks at a press conference held on 20 July.
“In recent years, China has continually driven financial opening in accordance with the principles of the market, the rule of law and internationalisation,” said Wang, highlighting efforts in several areas including:
- Continuing to drive external opening of the bond market, stock market, forex market, commodities futures market, financial derivatives market.
- Cancelling percentage restrictions on foreign holdings of equity in sectors including banking, securities, funds, futures and life insurance.
- Loosening the entry restrictions for enterprises to enter sectors including credit ratings and payments.