The People's Bank of China will continue to strengthen the opening of financial markets in pilot free trade zones while enhancing innovation and connecting with international economic rules.

In the coming period, the bank will coordinate with relevant agencies to increase the application of the digital Renminbi, while disseminating experiences from Shanghai to promote open and innovative financial development nationwide.

MAIN CONTENT

  • The People's Bank of China is enhancing openness and innovation in the Shanghai free trade pilot zone.

  • Develop the digital Renminbi and optimize electronic payment services nationwide.

  • Transfer successful experiences from Shanghai to replicate the innovative financial development model.

What is the People's Bank of China's focus in the pilot free trade zones?

According to Mr. Ji Min, Head of the Research Department of the People's Bank of China, the main goal is to expand connections with high-standard international trade regulations and develop financial innovation capabilities.

Mr. Ji Min emphasized ensuring risk safety while expanding the pilot of new financial policies in the free trade zone, particularly focusing on piloting financial products such as offshore bonds and upgrading free trade account functions.

"We need to leverage Shanghai's experience to replicate the financial innovation model widely, thereby promoting the digital application in payments and modern financial services."

Ji Min, Head of the Research Department of the People's Bank of China, July 2024

What do the newly announced supporting policies include?

At the recent Lujiazui Forum, eight supporting policies were announced to promote the development of offshore bonds, upgrade free trade accounts, and pilot reforms in offshore financial trade services.

This aims to diversify financial instruments while enhancing the ability to serve the international transaction needs of businesses in the pilot area.

How does the People's Bank of China promote the development of the digital Renminbi?

The bank will implement measures to promote the application of the digital Renminbi in free trade zones, thereby expanding nationwide to enhance the convenience of electronic payments.

Mr. Ji Min stated that this is a strategic move to enhance the digital financial ecosystem while creating a solid foundation for cross-border trade and transparent finance.

What are the practical examples of innovation achievements in the Shanghai area?

In an official report in 2023, the Shanghai free trade zone recorded a liquidity and offshore financial transaction growth of over 15%, along with the launch of a pilot advanced e-commerce account.

The new policies contribute to enhancing Shanghai's attractiveness as a leading international financial center, while facilitating businesses and investors' access to global markets.

How is the Shanghai model replicated and applied in other pilot zones?

The People's Bank of China will enhance the transfer and application of the 'Shanghai Experience' model to support synchronous and innovative development in other free trade zones.

This strategy is expected to promote the level of market openness, enhance the quality of financial services, and create a sustainable development foundation on a national scale.

"Replicating the successful model of Shanghai not only helps economic growth but also ensures the stability of the entire financial system."

Mr. Li Wei, Senior Economist, Chinese Academy of Finance, 2024

What are the benefits of applying the digital Renminbi?

The digital Renminbi helps minimize transaction costs, accelerate payments, and enhance security, while facilitating the management and control of digital cash flow.

The stability and convenience of this currency significantly contribute to promoting trade and financial transactions on digital platforms more efficiently and transparently.

What are the next steps the bank plans to implement?

The People's Bank of China will closely cooperate with departments to continue refining the legal framework, enhance international cooperation, and promote large-scale electronic payment projects in free trade zones.

The integrated approach between financial opening and risk control is seen as a key factor in the upcoming national financial development strategy.

Frequently asked questions

  • What support does the People's Bank of China provide in the pilot free trade zones?
    The bank focuses on developing new financial instruments, expanding innovation, and enhancing connectivity with international standards based on effective risk control.

  • What role does the digital Renminbi play?
    This is a modern payment tool that optimizes costs and enhances security in financial and trade transactions.

  • How is the 'Shanghai Experience' model applied?
    This model supports the expansion of innovative financial policies and risk management to stabilize the financial market's growth.

  • What do the new policies at the Lujiazui Forum include?
    Including the development of offshore bonds, upgrading free trade accounts, and reforming financial services in the pilot area.

  • What are the next steps in the bank's financial opening strategy?
    Legal refinement, international integration, and promoting large-scale electronic payments linked with risk control.

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