Non-financial firms in China (Shanghai) Pilot Free Trade Zone will be allowed to freely convert cash raised from overseas debt into yuan, authorities said in Shanghai Thursday evening.
According to a circular released by State Administration of Foreign Exchange, non-financial firms within Shanghai's Free Trade Zone will be given freedom to choose whether they would like to convert their cash raised from overseas debt into yuan, which will save enterprises' cost of cash management and settlement.
The circular also said that SAFE will allow authorities at FTZ to roll out measures to simply FTZ-bounded enterprises settlements using foreign exchanges and cash pool management.
The measures mentioned in the circular are the first batch of detailed rules after authorities launched 40 general guidelines for financial reforms and opening up pilot programs at Shanghai FTZ on October 30.
More measures and detailed rules will be introduced in the near future to implement the general requirements made by China's top leadership to strengthen financial reforms and piloted programs at Shanghai's FTZ, according to SAFE and central bank's Shanghai Head Office.
On November 25, Premier Li Keqiang urged financial service institutions at Shanghai FTZ to carry out stronger reforms and opening up during his visit to the free trade zone.
Financial managers of FTZ-bounded enterprises said that these measures reflect changes of foreign exchange management reforms, which will significantly improve foreign exchange management efficiencies in the long run.
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