Multiple departments recently jointly issued the "Action Plan for Further Enhancing the Convenience of Cross-Border Financial Services in the Shanghai International Financial Center"; the central bank held a press conference today, where relevant officials stated they will continue to optimize the toolbox of cross-border financial service policies to effectively support enterprises going abroad; several market participants told reporters from the Financial Associated Press that the plan emphasizes the cross-border use of the Renminbi and the policy orientation of safeguarding international trade investment.
On April 23, the Financial Associated Press reported (Reporter: Cao Yuyi) that recently, the People's Bank of China, the Financial Regulatory Administration, the State Administration of Foreign Exchange, and the Shanghai Municipal People's Government jointly issued the "Action Plan for Further Enhancing the Convenience of Cross-Border Financial Services in the Shanghai International Financial Center" (hereinafter referred to as the "Action Plan").
Today, the central bank held a press conference to introduce the relevant information about the "Action Plan". Relevant officials stated that they will continue to optimize the toolbox of cross-border financial service policies to effectively support enterprises going abroad.
According to data released today by the Shanghai Headquarters of the People's Bank of China, the settlement volume of cross-border Renminbi business in Shanghai in March reached 2,914.3 billion yuan by the end of March, with 100 banks in Shanghai reporting cross-border Renminbi settlement business information.
At the press conference, Su Yun, deputy director of the Shanghai Headquarters of the People's Bank of China, responded to questions from reporters from the Financial Associated Press, stating that they have provided convenient and flexible financial services to over 0.047 million clients in terms of free trade accounts, with a total cross-border income and expenditure amount of nearly 260 trillion yuan, forming a batch of replicable and promotable Shanghai experience.
Several industry insiders told reporters from the Financial Associated Press that against the backdrop of reciprocal tariffs, this plan highlights the priority of local currency, prevents Forex risks, ensures financial security and stability, and reflects the policy orientation emphasizing the cross-border use of the Renminbi to protect international trade financing.
Regarding subsequent policies, experts believe that the Financial Regulatory Administration has not yet issued detailed rules for syndicate cross-border transfers, and it is expected that subsequent documents will clarify this, such as allowing syndicate transfers within groups and transferring domestic syndicate shares to Overseas, along with inflow of funds.
The 18 measures will help enterprises better cope with risks and challenges in cross-border business.
Overall, regarding the "Action Plan," Lu Lei, a member of the Party Committee and Vice Governor of the People's Bank of China, stated that the plan is beneficial for enhancing the internationalization level of Shanghai as an International Financial Center, continuously strengthening its competitiveness and influence, and better serving the construction of a strong financial country.
Regarding the highlights of the plan, Wang Xin, Director of the Research Bureau of the People's Bank of China, pointed out that multiple policies are being tried ahead of others, providing the "Shanghai experience" for replication and promotion in other regions. For instance, a pilot program supporting RMB cross-border trade refinancing through the rediscount window has officially launched in Shanghai in December 2024, which can alleviate investment pressures on foreign trade enterprises and activate Assets, encouraging commercial banks to further enhance support for foreign trade enterprises.
At the press conference, Su Yun, Deputy Director of the Shanghai Headquarters of the People's Bank of China, stated in response to a question from Cailian Press that convenient and flexible financial services have been provided for over 0.047 million customers regarding Free Trade Accounts, with a cumulative total of nearly 260 trillion yuan in cross-border receipts and payments, forming a batch of replicable and promotable Shanghai experiences.
Su Yun mentioned that regarding the facilitation of foreign debt management, a high-level openness pilot for cross-border trade financing is being conducted in the new area of the Shanghai Free Trade Pilot Zone, allowing eligible small and micro high-tech enterprises in the pilot area to borrow foreign debts autonomously within a certain limit based on their actual business needs. High-tech Specialized, Special and New small and medium-sized enterprises in Shanghai that meet the conditions can autonomously borrow foreign debts within a limit of no more than 10 million U.S. dollars equivalent, effectively solving the problems of financing difficulties and high costs for startups, and supporting business development and industry upgrading.
To facilitate the cross-border capital financing of finance leasing companies, this "Action Plan" further relaxes the applicable subjects of policies based on previous policies and broadens the scope of rent usage. It allows foreign currency rents collected domestically by finance leasing companies, including financial leasing companies, to be used for approved purposes.
According to data released today by the Shanghai Headquarters of the People's Bank of China, the cross-border RMB business settlement volume in Shanghai for March reached 2914.3 billion yuan, with a cumulative settlement volume of 8333.3 billion yuan from January to March, and by the end of March, there were 100 banks in the Shanghai jurisdiction reporting cross-border RMB settlement business information.
In addition, regarding optimizing business processes, the "Action Plan" clearly supports pilot banks such as Bank Of China, China CITIC Bank Corporation, MINSHENG BANK, and Citibank (China) Limited in carrying out business in Shanghai branches according to new regulations. A due diligence and exemption appeal evaluation mechanism for foreign exchange business of pilot banks will be established, supporting banks to appeal against suspected violations, and relying on the self-regulatory mechanism of the foreign exchange market to conduct evaluations, reasonably determining the banks' "due diligence" situation, and improving the quality and efficiency of cross-border financial services.
"In recent years, China has significantly relaxed market access for financial services, expanded cross-border investment and financing channels, and foreign financial institutions in banking, securities, insurance, and Funds have accelerated their entry into the Chinese market. The speed of financial openness has greatly accelerated, continuously moving toward a higher level," said Dong Ximiao, chief researcher at Zhailian. In the future, China's financial industry will further expand and deepen its openness, and China will continue to attract overseas financial institutions to accelerate their entry and deep participation.
Liu Bin, director of the Financial Research Office of the China (Shanghai) Free Trade Zone Research Institute (Pudong Reform and Development Research Institute), told the Financial Associated Press that the current Global economic ties are becoming increasingly close, and the demand for enterprises to "go out" is constantly increasing, making the importance of cross-border Financial services increasingly prominent. The release of this plan is to meet the growing demand for cross-border Financial services from enterprises, support them to participate more effectively in international competition and cooperation, and further promote the development of economic globalization.
"Currently, trade protectionism is rising, and fluctuations in the international Financial market are intensifying, facing a reconstruction of the Global Industry Chain and supply chain. Releasing this plan can help enterprises better cope with the risks and challenges in cross-border business, enhancing the stability and resilience of China's Financial system," Liu Bin believes.
"To support the construction of Shanghai as an International Financial center, the Shanghai Free Trade Zone is exploring a higher-level Financial opening and innovation, in line with the new development requirements for KUAJINGZIJIN management models. The Shanghai headquarters will achieve the free receipt and payment of cross-border funds based on effective risk isolation, expand the Free Trade Account, support offshore economic and trade functions, and further enhance the facilitation level of cross-border trade and investment," Su Yun stated.
"Against the backdrop of reciprocal tariffs, this plan emphasizes the priority of local currency, prevents Forex risks, ensures Financial security and stability, and reflects the policy orientation that emphasizes the cross-border use of the renminbi to safeguard international trade and investment financing," said Wang Zhiyi, founder of the cross-border Financial research and consulting institution Shanghai Fangchang Information Development Company, to the Financial Associated Press.
Product innovation supports enterprises to "go out" and will later highlight more details on foreign debt policies.
Shi Lin from the International Research Institute of Green Finance at Central University of Finance and Economics believes that compared to previous policies that focused on "channel construction" or "compliance management", the "Action Plan" emphasizes systematization, targeting, and innovation. Firstly, this policy emphasizes enhancing systematic support capabilities, from optimizing the fund pool to the CIPS cross-border renminbi network, from the application of blockchain technology to the international bridge of digital renminbi, gradually forming a multi-layered Financial infrastructure system. At the same time, the "Action Plan" strives to provide a "full life cycle + all elements" Financial support system for enterprises that "go out" in multiple dimensions such as policy, tools, platforms, and risk control.
One of the major innovations of this plan is to support Banks in developing deposit products based on overseas institutions' Free Trade Accounts, allowing non-resident foreign currency deposit rates to refer to international practices for market-based pricing. Promoting Financial Institutions to enhance their digital service levels, supporting the pilot Banks for digital renminbi operations in Shanghai to actively participate in the multilateral central bank digital currency bridge project, exploring innovative and characteristic scenarios.
In addition, the "Action Plan" proposes to enhance the functionality and global network coverage of the renminbi cross-border payment system (CIPS). Promote more Banks to join CIPS and continually expand the coverage area of the CIPS network.
According to the CIPS, as of the end of December 2024, there are 168 direct participants and 1,461 indirect participants in the CIPS system, covering a total of 119 countries and regions worldwide. With a more diverse range of participants and a wider geographical distribution, CIPS has formed a global network system supported by Chinese-funded banks and clearing operations, as well as systemically important foreign banks.
Wang Zhiyi stated that the 'Action Plan' mentions the renminbi multiple times, covering its settlement, clearing, financing, and pricing functions, while emphasizing the prevention of Forex risks to ensure financial security and stability. This reflects the policy orientation of optimizing the cross-border usage of the renminbi to safeguard international trade and investment financing.
The 'Action Plan' mentions that, under the premise of legal compliance, pilot cross-border transfers of syndicated loan shares will be conducted at institutions recognized by the Financial Regulatory Bureau, optimizing the management of foreign debt registration and cross-border guarantee processes to better meet the syndicated loan needs of domestic enterprises in the 'going out' process.
Wang Zhiyi believes that further regulatory documents will be issued to clarify regulations in this area. 'The cross-border transfer of syndicated loan shares primarily involves policies related to cross-border asset transfers by the Financial Regulatory Bureau and the State Administration of Foreign Exchange. Currently, there are no specific regulations regarding cross-border transfers of syndicated loans, but it is expected that clarifications will be provided later.' He also anticipates that additional policy details related to foreign debt will be released in the future.
