Shanghai FTZ to roll out free trade account

Rules on implementation of the free trade account system that enables full convertibility of the Chinese currency and allows offshore financing in the Shanghai Free Trade Zone (FTZ) will be rolled out before the end of June, an official said Tuesday. The account will help Chinese companies, especially those engaged in foreign trade, secure cheaper yuan-denominated funding from offshore, where financing costs have been lower than that on the Chinese mainland. "We hope to have the account in place by the end of the first half of this year," said Dai Haibo, deputy director of the Shanghai FTZ administrative committee. China's central bank previously eased restrictions on overseas investment by individuals by allowing those working in the zone to open an account for overseas investment. Nearly six months after it was established in September, the FTZ in Shanghai's Pudong District has launched pilot schemes to advance financial reforms. Key programs include easing the cross border use of the Chinese yuan, liberalizing interest rates on foreign currency loans, facilitating offshore financing and outbound investment. Dai also said that financial reforms in the zone are expected to be rolled out and tested so they can be applied elsewhere in China by September, the trade zone's one year anniversary.