SHANGHAI, September 30 (SMM) - Shanghai pilot free trade zone (hereinafter FTZ), approved by China’s State Council earlier this year, was formally inaugurated on Sunday September 29.
Shanghai Metals Market will provide our exclusive commentary on FTZ policy innovations at our exhibition stand of LME Week 2013 on October 7 in the No.3 Pickwick Suite, Queen Elizabeth II Conference Centre, London.
The following is an excerpt from our commentary to be provided that day. The full article will appear on this website on October 8.
Shanghai FTZ will trial innovations in three areas: finance, trade and investment, SMM has learned from the zone authorities.
A key innovation in the FTZ will be a Free Trade Unit system comprised of Free Trade Accounts (hereinafter FTA), allowed to be opened by the Shanghai branches of five Chinese banks: Bank of China, Bank of Communications, Commercial and Industrial Bank of China, China Merchants Bank and Shanghai Pudong Development Bank.
Once the five banks complete setting up their FTAs which will transact both onshore and offshore RMB, they will have to close their on-shore RMB accounts as per requirements from People’s Bank of China, the main government body orchestrating the FTZ.
Impact on metals industry
Among base metals, financing deals using aluminium and nickel may catch up with those of copper, which have already matured in the past several years via existing bonded zones.
Processing trade companies from the metals industry are likely to benefit from tax advantages offered to resident firms. For instance, they may be entitled to import duty cancellation and income tax of only 15%.
Resident firms in the FTZ are also expected to be encouraged to use RMB widely in cross-border trade settlement for their imports and exports of metals and other commodities.