In order to implement the important strategic deployment of the CPC Central Committee and the State Council on the construction of China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Pilot Zone), support the construction of the Pilot Zone, promote the development of the real economy in the Pilot Zone, increase financial support for cross-border investment and trade, deepen financial reform, and expand opening up, we hereby put forward the following opinions.
I. General principles
(1) Adhere to financial services to the real economy, further promote trade and investment facilitation, expand financial opening to the outside world, and promote the pilot area to participate in international competition on a higher platform.
Comments: The focus of financial reform is to serve and promote the real economy, that is to say, purely speculative financial activities that are divorced from actual trade and investment needs are not encouraged.
(2) Adhere to reform and innovation, try first, and make efforts to promote pilot reforms in the fields of cross-border use of RMB, convertibility of RMB capital account, interest rate marketization, and foreign exchange management.
(three) adhere to the risk control, steady progress, "mature one, promote one", timely and orderly organization of the pilot.
The second is to innovate the account system that is conducive to risk management.
Comments: This is the dry goods with the highest gold content, the core of which is account management, offshore freedom, two-way interoperability and limited penetration.
(4) Residents in the experimental area can realize sub-account accounting management by setting up local and foreign currency free trade accounts (hereinafter referred to as residents' free trade accounts) and carry out the investment and financing innovation business in the third part of this opinion;
Comments: Residents in the experimental area can set up free trade zone accounts. There are no special words such as "qualified" and "approved" here, and there is considerable room for reform imagination. It is expected that in the subsequent implementation rules, the qualifications of resident enterprises will be recognized, that is, not all resident enterprises registered in the free trade zone can open FTA.
Non-residents can open non-resident free trade accounts in local and foreign currencies in banks in the experimental area (hereinafter referred to as non-resident free trade accounts) and enjoy relevant financial services according to the principle of national treatment before entry.
Remarks: Non-residents can set up offshore account. This article only reaffirms the existing policy, but the words "national treatment before entry" appear here, suggesting that offshore account with foreign investment should be further deregulated, and it is estimated that it will enjoy the same treatment as FTA accounts of resident enterprises.
(5) Funds between resident free trade accounts and overseas accounts, non-resident accounts outside the domestic area, non-resident free trade accounts and other resident free trade accounts can be freely transferred.
Comments: This is the proper meaning of the FTA account. Since it is clear that the account is offshore, of course, it should be freely transferred with overseas accounts, non-resident free trade zone accounts, non-free trade zone NRA accounts, and other resident free trade zone accounts with the same offshore nature.
Funds can be transferred between the resident free trade account of the same non-financial institution and other bank settlement accounts for regular business, loan repayment, industrial investment and other cross-border transactions that meet the requirements.
Comments: The core is this sentence. The same entity can set up branches or subsidiaries in the free trade zone and set up institutions in non-free trade zones. The former is FTA offshore account, and the latter is an ordinary onshore account. In the past, so-called "window" companies set up by some domestic enterprises in Singapore and other places can now be directly placed in the Shanghai Free Trade Zone. Crucially, in the case of "3+ 1", especially loan repayment, industrial investment and others, involving capital projects, there is room for imagination, allowing offshore account and onshore accounts under the same entity to realize capital transfer. In particular, there is no concept of quota management here, leaving a lot of room for imagination. It is estimated that there will still be quota control in the future. In any case, this means that funds from non-free trade zones can be dispatched to the free trade zone, from which they can go to sea, and vice versa. Of course, don't forget that the monitoring of short-term capital flows will be mentioned later, and anti-money laundering, anti-terrorist financing, anti-tax evasion and other obligations must be fulfilled.