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China to Back Shanghai’s Trial of Free Use of Yuan
Published on: 2021-07-22
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China's central bank will support Shanghai to pilot the free exchange of renminbi and explore the free flow of capital to facilitate cross-border trade and investment, an official said on Tuesday at a press conference introducing Shanghai's further opening-up.

The People's Bank of China will back up Shanghai's trial in the free use of RMB, further facilitate the free flow of enterprises' trade and investment funds, and explore the free flow and free convertibility of capital in its Lingang Special Area, said Wang Xin, director-general of the PBOC's Research Bureau.

Wang noted that the free convertibility of RMB and the free flow of capital should meet anti-money laundering, anti-terrorist financing and anti-tax evasion regulatory requirements.

The RMB is convertible for trade purposes under the current account, but it is not freely convertible under the capital account, which covers portfolio investment and borrowing.

Some say the financial hub Shanghai, especially, should do more in this respect. The move will be conducive to foreign investors who have a growing willingness to hold RMB financial assets, as Shanghai is becoming a center for RMB assets allocation, pricing and risk management.

央行:支持上海在人民币可自由使用方面先行先试

央行研究局局长王信表示,下一步,人民银行将一如既往支持上海国际金融中心建设,支持上海进一步完善金融市场体系、产品体系、机构体系和金融基础设施体系,强化全球金融资源的配置功能。同时,支持上海在人民币可自由使用方面先行先试,在符合反洗钱、反恐怖融资、反逃税和展业三原则的要求下,进一步便利企业贸易投资资金的进出,探索临港新片区内资本自由流入流出和自由兑换,助力上海成为新发展格局下联通国际市场和国内市场的重要枢纽和桥梁。

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