Overseas workers in Shanghai FTZ get green light to access banking services

China's central bank will allow qualified international employees working in the China (Shanghai) Pilot Free Trade Zone to open overseas personal free trade accounts, as part of a series of reforms encouraging innovation and cross-border investment.

The measure, announced at a news conference in Shanghai on Nov 23 by the People's Bank of China, is the first of its kind allowing international staff working in the city to have easy and direct financing services through bank accounts at local lenders.

Now that the measure is in effect, qualified foreigners can access cross-border financial services and do not have to use overseas services as they did before.

The central bank says the move is aimed at encouraging innovation, and cross-border investment and trade in a bid to make trade more active, and extend the functions of free trade accounts from corporate financing to personal financing.

Wang Xinhao, Shanghai Pudong Development Bank's Shanghai branch head, says the new policy enables commercial banks and financial service providers to meet demand from high-level foreign employees in the city.

"This policy will make cross-border personal financing services more active, a long-term benefit for financial services providers in China," says Wang.

Steve Ma, an expert in the food and beverage sector and a senior executive with a multinational in Shanghai, says he applauds the new policy because it will enable him to better utilize the financial services of local banks, including making financial plans for his family, such as wealth management, insurance and investment in financial products.

The regulator also announced a series of other measures to deepen opening-up and reform as the Shanghai Free Trade Zone has been piloting more policies that are likely to be adopted nationwide if they prove successful and beneficial to the country's economic and social development.

The measures include allowing private equity funds and projects in the free trade zone to raise capital in the zone, as well as overseas, and use the proceeds for cross-border investment.

Multinational corporations are allowed to establish onshore cross-border renminbi capital pools by using Shanghai Free Trade Zone accounts to manage their renminbi holdings globally, according to the central bank.

"A balanced inflow and outflow of capital in the Shanghai Free Trade Zone will benefit China's financial stability," says Zhou Hehua, Bank of China's Shanghai branch head.

wuyiyao@chinadaily.com.cn