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The Shanghai Pilot Free Trade Zone is set to introduce a pilot program that allows qualified companies to establish upgraded foreign trade accounts, enabling them to transfer funds internationally with greater ease. Starting tomorrow, this new Cross-Border First-Tier Channel will permit selected companies to independently perform activities such as domestic and foreign currency conversions, cross-border transactions, and overseas hedging—all within a single account system.
To qualify for the pilot, businesses must have been registered for over a year, possess owner’s equity of at least CNY 200 million (approximately USD 28.3 million), report annual operating revenues of no less than CNY 1 billion (around USD 141.5 million), and maintain a balance of payments exceeding CNY 100 million. Priority will be given to companies based in strategic areas, including the Lingang Special Area.
From tomorrow onward, participating firms will be able to engage in cross-border receipts and payments, secure cross-border financing, and provide overseas loans without traditional quota restrictions or special approval procedures. There will no longer be a need for prior filings, reviews, or the opening of designated special accounts.
The account upgrade is expected to speed up the process for multinational corporations and trading companies to settle and allocate funds from T+3 to T+0, drastically reducing their financial expenses. This enhancement in payment efficiency is projected to be a significant advantage for companies operating on a global scale.
Additionally, businesses will gain more flexible options for managing cross-border capital flows. Multinational firms can leverage interest rate differences between domestic and international markets to optimize their financing strategies. The overall efficiency of fund collection and distribution for trading companies will greatly improve, and small and medium-sized domestic enterprises will be able to access more affordable foreign financing.
Financial institutions’ cross-border services will also evolve, shifting from simple transaction channels to comprehensive service providers. Their focus will expand to include global cash management, risk mitigation strategies, and cross-border investment and financing solutions.
While foreign trade accounts have facilitated international transactions for over ten years, they have faced shortcomings, such as separate management of domestic and foreign currencies, transaction-by-transaction review processes, and lengthy cross-border settlement chains. The upgraded accounts will provide a competitive advantage by streamlining costs, reducing risks, and increasing operational efficiency compared to existing international capital management tools. These improvements are expected to lower companies’ financial costs and enhance risk management accuracy.
In the medium to long term, the success of this new framework could serve as a model for other economic zones across the country, laying the groundwork for a more open and robust economic system. The initiative marks a new chapter in Shanghai’s efforts to deepen cross-border financial openness, attracting more multinational corporations and accelerating its development as an international financial hub with advanced global resource allocation capabilities.
This account upgrade initiative is part of a broader policy outlined by the city’s central bank office last month.
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