Domestic banks in Shanghai FTZ get Beijing nod for offshore business

Part of reforms to arrest economic slowdown.

Chinese banks in the Shanghai Free Trade Zone (FTZ) are now allowed to conduct offshore business, another move to liberalize financial markets. They will be permitted to provide services to depositors who are residents of other countries.

Shanghai FTZ will also allow eligible foreign financial institutions to set up banks, and partner with qualified domestic banks in joint-ventures.

China Construction Bank, Industrial and Commercial Bank of China, Bank of Shanghai and Shanghai Pudong Development Bank have received approvals to set up branch banks in the FTZ.

Shanghai Pudong Development Bank sees the FTZ as a great opportunity to provide clients with services based on its offshore and onshore financial platforms.

China aims to make the FTZ equal to international standards featuring convenient investment and trade, free exchange of currencies, efficient supervision and a sound legal environment after two to three years of tests.

The Shanghai FTZ is a pet project of Premier Li Keqiang and is expected to present stiff competition to Hong Kong.