China's free trade zone plans herald quicker FX reforms
By Saikat Chatterjee and Pete Sweeney
SHANGHAI/HONG KONG (Reuters) - China plans to roll out financial sector reforms in the Shanghai special economic zone in the next three months and most will be implemented in a year, suggesting authorities are accelerating the pace of dismantling capital account controls.
A People's Bank of China (PBOC) statement on Wednesday for the first time gave a timeline for launching deep reforms in the zone, adding they could then be duplicated in other similar zones around the country.
The statement came after the PBOC provided additional detail for its plans for financial liberalization in the Shanghai free trade zone (FTZ) in a separate document published on Monday.
However, cross referencing the two statements does not provide a specific deadline for any one reform. It also is not clear if major reforms, such as allowing the yuan to trade freely, would be included as part of "most" of the reforms.
Still, analysts suggested the statements point to more significant action than seen in the past, especially as they follow a meeting of the Communist Party leaders in November that set a bold agenda for nationwide reform in the years to come.
"Financial reform in the pilot zone is not in the past tense, nor the future tense, but the present tense," PBOC Shanghai chief Zhang Xin said in a statement posted on the bank's Shanghai branch website.
The announcements have boosted investor optimism - at least temporarily - that Beijing is serious about reforms in the FTZ.
Expectations had eased off the back of a lack of detailed announcements and timelines after the zone was launched in September. The absence of major leaders at the opening event also prompted speculation the zone lacked top-level support and had become the focus of a bureaucratic turf war, and in fact state media had repeatedly warned that implementation would take time. Continued...