Shanghai Advances Cross-Border Financial Connectivity with New Policy Blueprint
Shanghai has introduced a new policy package to enhance cross-border financial services, aiming to streamline foreign exchange operations, support outbound investment, and strengthen the city's position as a global financial center. The initiative, jointly issued by the PBOC, NFRA, SAFE, and the Shanghai Municipal Government, includes 18 measures focused on five areas: settlements, FX risk management, financing, insurance, and integrated financial solutions.
Smoother FX Operations and Treasury Tools
A core feature is the expansion of RMB cross-border settlements via CIPS, with improved access for banks and new digital infrastructure. Banks are encouraged to adopt enterprise-level risk assessments to simplify foreign exchange compliance, and pilot programs will ease onboarding and due diligence for qualified firms.
The plan also enhances treasury support for multinationals in Shanghai, especially in Pudong. RMB and FX cash pooling, real-time cash flow tools, and tax incentives are expected to improve liquidity management for regional HQs and outbound-facing firms.
Boosting FX Hedging and Trade Finance Access
To help firms manage currency risk, the plan promotes FX derivative tools, including subsidized options for SMEs. Local guarantee institutions will collaborate with commercial banks to lower the cost of hedging.
Trade finance will also benefit, with select banks receiving rediscount support for RMB-denominated trade. Regulatory pilots will simplify syndicated loan transfers and encourage offshore project lending.
The blueprint supports broader RMB usage in Belt and Road transactions and calls for digital verification tools and blockchain pilots to speed up processing and ensure compliance—especially relevant for shipping, infrastructure, and equipment exports.
Implications for Global Firms
For international banks, legal advisors, and multinationals, the plan signals a more streamlined regulatory environment. It emphasizes risk-based compliance, expanded use of digital tools, and greater operational clarity—especially for firms managing FX, payments, or treasury from Shanghai.
While structural challenges remain, the direction is clear: targeted financial openness, grounded in risk control and service efficiency, is becoming a core theme of Shanghai’s financial reform agenda.
First, please LoginComment After ~