PBOC to experiment with RMB capital flows in Shanghai
(11 June 2013 – China) Shanghai is expecting to receive government approval to trial renminbi (RMB) convertibility at the Qianhai zone.
Chinese government approval for Shanghai to open a free trade zone to test the RMB convertibility and cross-border capital flows will allow it to experiment with capital account liberalisation and RMB convertibility.
China's financial centre fears that it could be left behind as rival financial hubs such as Hong Kong and Taiwan develop cross-border renminbi financial services.
The Qianhai zone administered by the People's Bank of China (PBOC) allows banks from Hong Kong to offer cross-border renminbi-denominated loans to mainland companies in the zone.
The zone is expected to be approved in July and will be located near China's existing Waigaoqiao free trade zone in Pudong district.
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