Banks open free trade accounts in FTZ

Five banks in Shanghai opened the first so-called free trade accounts for companies in Shanghai's pilot free trade zone as preparation for further reforms in the zone.

Shanghai branches of the Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Pudong Development Bank, and the Bank of Shanghai have been allowed to open a special account for companies registered in the zone to facilitate cross-border money transfers, the Shanghai headquarters of the People's Bank of China said in a statement today.

Shanghai branches of Bank of Communications and China Merchants Bank have also gained approval to open such accounts for clients, the statement said.

"The free trade account offers easier yuan transfers under direct foreign investment and current accounts," said Zhang Xuhong, general manager of Bank of Shanghai's international business department.

Individuals working in the free trade zone will also be allowed to open free trade accounts, but qualifications have yet to be determined, central bank officials said.

Holders of such accounts will theoretically be allowed to transfer local and foreign currencies in and out of China without being subject to the strict capital controls that apply outside the zone, according to the central bank's blueprint unveiled in December.

Insurers and brokerages are also working to set up a free trade account system for clients to handle cross-border business, the Shanghai headquarters of the central bank said today.