2014-15 Canada-China Business Forum Magazine | Page 26
TRADE
certainly prepare the 2014 and 2015 lists, which are
expected to be much shorter than the 2013 list. As
promised, the 2014 list was published in June 2014.
Restrictions were reduced by 27 per cent. However, it is
still deemed as an “unqualified” negative list.
COMMERCE
institutions in the Zone may borrow offshore
Renminbi to as much as 100 per cent of the firm’s
registered capital or 150 per cent for non-financial
institutions. Select multinationals can enjoy a
so-called two-way cross-border Renminbi cashpooling financial service which can help them
conveniently deal with their balance sheets with
multiple currencies. In February 2014, Renminbi
settlement for cross-border e-commerce was
relaxed to designated firms. More facilitation
measures are implemented to help the cross-border
Renminbi settlement for current account and direct
investment.
The U.S. Secretary of Commerce stated that the 2014
list couldn’t serve as the basis for China-U.S. BIT
negotiations. Two major concerns have been raised
against the 2014 list. The first concern is that there are
still too many restrictions on the key service sectors,
such as financial and other sectors. Second concern,
is that restrictions are still so general that the Central
government may intervene at any time with foreign
investments, and resulting in a broader negative list
than it may appear to be. Nevertheless, one can see
real progress made by the Central government, and the
negative list is becoming shorter, more transparent and
applicable to foreign investors.
Among these liberalization policies, the most
important one is the Free Trade Account Unit
(FTU). Since May 2014, eligible institutions
and individuals can transfer and convert funds
conveniently to accounts overseas, to other FTUs
and to foreign entities in China. Via FTUs, the
Shanghai FTZ is going to be the financial entrepôt
for both Chinese and international capital, although
current liberalization efforts are mainly limited to
current accounts and foreign direct investment.
Despite criticisms, financial liberalization is receiving
more positive reviews. Twenty-three foreign firms had
established themselves in the Zone within a month
after the release of the 2013 negative list. The number
of firms grew slowly to 38 firms two months later.
However, after the proposal on financial liberalization
made by the People’s Bank of China (PBOC) in
December 2013, the number of firms jumped to 95 in
less than a month. The number then exploded to 800
before the 2014 negative list was even released. Each
firm had an average investment of over USD 6 million.
While it is still not clear how and to what extent the
Shanghai FTZ can achieve its ambitious goals, it
is clear that the Central government has made up
its mind to push forward the “deepwater reforms”
in order to face internal and external challenges.
As emphasized repeatedly, that if successful, the
experiments in the Shanghai FTZ will be replicated
in the rest of China. To those who are interested in
the future of China, the Shanghai FTZ is certainly
the place worth paying attention to and exploring.
\\ BC
The PBOC financial reforms are in four key areas:
to internationalize the Renminbi for international
transactions; to gradually liberalize capital accounts; to
accomplish interest rate marketization; and to facilitate
Renminbi convertibility. In a word, PBOC’s ambition
is to promote the Renminbi internationalization.
The principle of the financial reforms is quite clear:
financial liberalization should be based on the real
economy, facilitate trade and investment, and have
sound risk control mechanisms. That disappoints some
observers. Many do not want to see as many financial
innovations and products such as those found in the
U.S. Detailed laws and regulations according to the
proposal have been gradually released since February
2014.
Bo Chen is deputy chair of
the Department of International
Economics and executive director
of the Research Centre on Free
Trade Zone at the Shanghai
University of Finance and Economics. Bo is
also a research associate at the Asia Pacific
Foundation of Canada, Federal Reserve Bank
of Dallas and the Pacific Economic Cooperation
Council. He is a consultant on various ongoing
government reform projects, especially on the
policies on trade and investment facilitation.
For instance, since February 21, 2014, the Shanghai
FTZ became the first place in Mainland China to
permit the inflow of Renminbi from abroad. Financial
25
La zone de libre-échange
de Shanghai : retour sur
les triomphes, les leçons
apprises et la voie à suivre
L
a décision de mettre sur pied une zone de libre-échange (ZLE) pilote à Shanghai, découle
de nombreux problèmes internes et externes auxquels la Chine fait aujourd’hui face. Il
est largement admis que les problèmes de ralentissement économique de la Chine sont des
symptômes du piège du revenu moyen (middle-income trap). Éviter ce piège nécessiterait
de pénibles changements structurels. Des ententes internationales de haute qualité
portant sur le libre-échange et l’investissement, comme les Partenariats Trans-Pacificique,
l’Accord sur le commerce des services (ACS) ainsi qu’une variété de négociations de Traités
d’investissement bilatéraux (TBI) ont poussé la Chine à se libéraliser face au reste du monde.
Pourtant, ni les changements structurels ni la
libéralisation des marchés ne sont des concepts
nouveaux pour les Chinois. Les « réformes en eaux
profondes » concernant la libéralisation des marchés
prennent beaucoup de temps à la Chine, car le
gouvernement est très soucieux des risques associés
à ces réformes. Considérant cela, le gouvernement
chinois a décidé de choisir Shanghai, dont l’industrie
des services financiers et commerciaux est mature,
comme un