PBOC: Policies in pilot free trade zone 'very soon'

A policy package from the central bank for the China (Shanghai) Pilot Free Trade Zone will be implemented "very, very soon", according to a published report.

The Shanghai-based Oriental Morning Post reported on Thursday that six to seven sets of bylaws will be announced by the People's Bank of China, laying out details of the 30-point policy guidelines issued earlier.

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Those guidelines govern financial reforms in the zone, which is supposed to spearhead the country's economic reforms over the next decade.

The 30-point package focuses on capital account and interest rate liberalization, but it also touches on other aspects of finance, including fundraising and trading.

The newspaper quoted a source who had seen the draft bylaws as saying "there won't be big breakthroughs, and any reform will focus on serving the real economy".

The PBOC didn't answer calls for comment by China Daily on Thursday.

According to the report, individuals will be free to conduct certain types of financial transactions using income earned in the zone.

Designated financial institutions will be permitted to trade bulk certificates of deposit, a transaction common in developed markets but currently banned in China.

Qualified institutions and individuals will be allowed to borrow yuan-denominated funds overseas, although those funds can't be used to invest in securities or derivatives or lend to other parties.

"It's urgent to spell out policies for the zone so that people know what to do," said Zhang Qi, an analyst with Haitong Securities Co Ltd in Shanghai.

 

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