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Shanghai to Open Non-local Foreign Currency Clearing Business
Approved by the State Administration of Foreign Exchange, Shanghai Branch of People's Bank of China (PBOC) and Shanghai Branch of the State Administration of Foreign Exchange, declared Monday that it will open non-local foreign currency clearing business as of November 1 on the basis of the existing foreign exchange clearing business in the same city.
An official with the Shanghai Branch of the PBOC indicated that the measure is adopted to facilitate the development of Shanghai's export-oriented economy and promote the economic exchange between Shanghai and neighboring provinces and cities so as to give a full play to its functions as a financial center. The opening of foreign exchange clearing business helps to bring about an early establishment of a non-local foreign exchange clearing system characterized by high speed, broad area, good service and low price, thereby creating a fair foreign exchange clearing environment for various Chinese and foreign-funded banks in Shanghai as well as making adequate preparations for a new round of opening upsurge for China's accession to the WTO.
It is reported that transnational companies and large foreign-funded enterprises settled in Shanghai have been increasing in number in recent years and, together with subsidiaries and related enterprises distributed in neighboring cities and other areas, have formed an operation and production pattern featuring "stores in front and factories at the back". This tendency has appropriately promoted the rapid development of Shanghai's foreign currency clearing business.
According to incomplete statistics, the average monthly clearing amount of non-local foreign currency in Shanghai's Chinese and foreign-funded banks has currently hit US$6.5 billion, in particular, foreign banks with a multitude of clients and with business being distributed in surrounding areas, are engaged in frequent clearing business.
Based on investigation and feasibility study and proof of the program, and considering the actual condition regarding the frequent exchange in foreign capital clearing in Shanghai and Jiangsu, particularly the southern Jiangsu region, Shanghai Branch of the State Administration of Foreign Exchange decided to join the Nanjing Branch Bureau to conduct reform of the non-local foreign exchange clearing business of the two places first and institute the relatively mature WANDA system, and regard it as the network supporting system and service platform of non-local foreign exchange clearing so that the time for the clearing of capital can reach the level of being put on account every other day.
According to the program, non-local foreign exchange clearing business will be first opened between Shanghai and Nanjing Branch of the State Administration of Foreign Exchange, related operational methods and detailed rules have reportedly been set down. On this basis, non-local foreign exchange clearing business will gradually be opened between Shanghai and sub-bureaus in Hangzhou and other areas, which will finally act in coordination with the RMB regional bill exchange business system that had earlier been opened by Shanghai and neighboring areas, to form an efficient and prompt domestic and foreign fund clearing system between Shanghai and other localities, so as to further improve the investment environment of Shanghai and its surrounding provinces and cities.
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