China's central bank Shanghai Head Office announced the launch of free trade account (FTA) operation on Wednesday, a milestone in financial reforms, to support trade in the China (Shanghai) Piloted Free Trade Zone (FTZ).
FTA will help Chinese free trade companies to seek yuan-denominated funding from offshore market where cost of yuan funding are lower than in domestic market.
Five banks started the FTZ operations on Wednesday, including Bank of China, Shang Pudong Development Bank and China Merchant Bank.
Shanghai Gold Exchange also signed a memorandum of understanding with the People's Bank of China (PBOC) in a bid to prepare an international board of gold exchange in the FTZ under the FTA mechanism, which will enable yuan-denominated trading of the precious metal in the zone.
Tu Guangshao, deputy major of Shanghai, said the move is a big leap forward for financial reforms in the FTZ which will significantly help future reforms and gradual opening up of China's financial market.
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| FTZ launches accounting unit for cross-border fund flow | Shanghai FTZ sees more liberalization |
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