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Business / Economy

Shanghai FTZ draws a slew of financial firms

By Gao Changxin in Shanghai (China Daily) Updated: 2014-04-29 09:00

A total of 31 financial institutions had been installed in the China (Shanghai) Pilot Free Trade Zone by the end of the first quarter, Shanghai's banking regulator said on Monday.

Shanghai FTZ draws a slew of financial firms
Shanghai FTZ draws a slew of financial firms

That included 20 foreign and 10 domestic banks. A financial leasing company also set up a branch in the zone, which was launched on Sept 29 to pioneer China's wide-ranging structural reforms.

The businesses' combined assets have reached 120.6 billion yuan ($19.3 billion). Combined loans have amounted to 65.4 billion yuan, while deposits stood at 92.5 billion yuan.

The Shanghai government said on March 31 that a total of 7,491 enterprises had been registered in the zone in the six months ending March 25. Of those, 628 are foreign companies with average registering capital of $4.68 million.

A total of 84 banks in Shanghai had established a line of business with enterprises in the zone, the Shanghai Banking Regulatory Commission said, countering previous media reports that most companies in the zone were idle because of policy vagueness. Among the 84 banks, seven said client numbers in the zone exceeded 1,000, while one had 7,583 clients.

Financial liberalization is one of the major tasks for the 29-square-kilometer zone, especially over interest rates, yuan convertibility and other market instruments. Liberalization is seen as crucial for Shanghai to realize its plan to become a global financial center by 2020.

Bloomberg reported last week that Shanghai will allow exchanges for iron ore, metals and energy in its free trade zone, which would boost banks' business scope and promote the yuan's convertibility.

Baosteel Group Corp and Shanghai Ganglian E-Commerce Holdings Co owner of China's largest steel researcher Mysteel.com, are among eight companies with approval to set up exchanges in the zone, Shanghai Ganglian Board Secretary Hu Xiaochun told Bloomberg in a phone interview on April 23. Baosteel is working with the Shanghai government and its partners to set up an iron ore exchange in the zone.

At the moment, 10 other foreign banks are in the process of setting up a foothold in the zone, according to Shanghai Banking regulator.

Australia and New Zealand Bank (China) Co Ltd was the latest foreign bank to have a presence in the zone.

On April 10, the Australian bank opened a sub-branch that will offer a range of banking products and services, including trade finance, foreign exchange, commodity finance and cash management in both foreign and local currencies.

"The Chinese government is actively pursuing further financial liberalization that supports economic growth by opening up its domestic financial system to international capital flows through the free trade zone," said ANZ Chief Executive Officer Mike Smith at the opening ceremony.

 

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