Shanghai FTZ to open financial sectors wider to foreign capital

View of skyscrapers including the Shanghai Tower and the Shanghai World Financial Center along the Huangpujiang River, Jan 24, 2017. [Photo/VCG]

Shanghai is likely to ease limits this year on foreign investment in the banking, securities brokerage, securities fund management, futures trading and insurance sectors, according to China (Shanghai) Pilot Free Trade Zone on Thursday.

The move is in line with the launch of updated guidance on foreign investment in the free trade zone, in accordance with the plan to make the free trade zone a hub for pilot market opening programs, said a statement from the Shanghai FTZ authorities.

In 2017, limits on foreign investment in accounting and auditing, construction design, and rating agencies will be eased in the free trade zone, with details to be launched soon, the statement said.

Detailed policies to ease limits on foreign investment in banking, securities, fund management, futures trading and insurance were being studied, said the statement.

"We have been working closely with policymakers on easing limits on these financial sectors which will enable more foreign investors to invest in a further opened market in the free trade zone. Once the policies are made, we will make every effort to implement them," according to the statement.

Shanghai FTZ was established on Sept 29, 2013, with an initial area of 28.78 square kilometers. It was expanded to 120.72 square kilometers on Dec 28 2014, to enable it to benefit more sectors and market players, and further the pace of reform and opening up.

According to research conducted by Yin Hua and Gao Weihe, researchers at Shanghai University of Finance and Economics, Shanghai FTZ has pushed up growth of the city's GDP, trade and investment.

"Shanghai FTZ increased Shanghai's GDP growth by 1.89 percent since it was launched three years ago," according to the researchers.

High-tech, finance, information services, research and development are among the sectors with the fastest growth in terms of foreign investment in the city, according to Shanghai Municipal Commission of Commerce.

Shang Yuying, the commission's director, said: "Foreign capital has contributed significantly to Shanghai's economic growth, representing two-thirds of the city's total gross industrial output in 2016. In the near future a more open market will benefit more sectors, particularly service industries."