BRIEF NEWS 09

Overseas Staff in SHFTZ Allowed to Use Local Banking Services

China’s central bank will allow qualified international employees working in the Shanghai Pilot Free Trade Zone (SHFTZ) 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. Qualified foreigners can access cross-border financial services and do not have to use overseas services as they did before.

The central bank said the move was 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.

Steve Ma, an expert in the food and beverage sector and a senior executive with a multinational in Shanghai, said that 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, including 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 SHFTZ accounts to manage their renminbi holdings globally, according to the central bank.

China's Outbound Direct Investment Increases

China's outbound direct investment (ODI) increased in the first 10 months of the year, with strong growth in the United States, official data showed on Nov. 17. Non-financial ODI increased 53.3 percent year-on-year to reach US$145.96 billion in the January-October period, while ODI in October grew 48.4 percent year-on-year, according to the Ministry of Commerce.

In the first 10 months of 2016, outbound investment from the Chinese mainland mostly went to the Hong Kong Special Administrative Region, ASEAN, the European Union, Australia, the United States, Russia and Japan. The United States registered the strongest year-on-year increase, at 173.9 percent. Most of the investment went to commercial services, manufacturing and retail, with equipment manufacturing almost quadrupling compared to last year.

Chinese companies continued to invest heavily in countries along the Belt and Road, signing construction contracts worth over US$84 billion during the period, up 30.7 percent year-on-year.

(Sources: Xinhua News Agency, CCTV.com, China News Service)