Business / Economy

Panel to push financial reform in FTZ

By Wei Tian in Shanghai (China Daily) Updated: 2014-01-04 07:40

Detailed policies on the move may be released by the end of February

Financial reform in the China (Shanghai) Pilot Free Trade Zone will shift into higher gear and detailed policies may be issued by the end of next month, following the establishment of a high-level panel.

The special group has been established to coordinate and advance the affairs of financial reform in the 28 sq km test zone, China Business News reported, citing an unidentified source connected to the financial authorities in Shanghai.

Panel to push financial reform in FTZ

The team held its first working meeting in December, the source said.

Financial officials at the FTZ administration's office couldn't be reached for comment.

"The establishment of the team will undoubtedly accelerate the pace of financial reforms that the zone ought to carry out," said Chen Bo, a professor at the Shanghai University of Finance and Economics.

Chen is also an expert at the FTZ's official research institute.

Tu Guangshao, executive deputy mayor of Shanghai, is said to be heading the team. Other members of the team include local officials from the central bank, local financial regulators and members of the economic planning agency.

The team also has members from the Shanghai FTZ administrative committee, which is directed by Ai Baojun, who is also a deputy mayor of Shanghai.

"Pushing forward financial reform requires a comprehensive plan and someone who can take responsibility for various missions," Chen said, adding that Tu's specific duties have always been in the financial sector, making him the ideal candidate.

"Setting up a special team to handle the project shows that financial reform is the primary task for Shanghai at the moment," Chen said.

Financial reform has been viewed as a key task but also a bottleneck in reaching the FTZ's goal of paving the way for China's next round of financial reform.

The People's Bank of China, the central bank, has issued guidelines that describe 30 policies for the financial sector. These include allowing private offshore accounts in the FTZ with more freedom in inbound and outbound investment. The guidelines also allow money to be transferred between offshore and domestic accounts.

However, the guidelines lack detailed rules for operation and regulation, points that have been left to the authorities in Shanghai.

Zhang Xin, head of the central bank's Shanghai branch, said in an earlier interview that detailed policies will be ready within three months. Other provinces are to follow those policies within a year.

There are several other provincial-level governments that are seeking to establish FTZs, such as Tianjin and Guangdong, and Chen said Guangdong might be the next to win approval when the time is ripe.

"In that case, Shanghai must push forward the actual financial reform as soon as possible to maintain its edge," he said, adding that detailed policies will be issued before the end of February.

In addition to loosening controls on the capital account, other expected areas of financial reform are market-oriented interest rates and fewer restrictions on foreign exchange.

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