China to facilitate increased cross-border financial services in Shanghai

China will take more steps to further facilitate cross-border financial services in Shanghai by leveraging the municipality's role as an international financial center, according to a plan jointly issued by the central bank, the Shanghai municipal government and other financial authorities.

The plan outlines 18 key measures including improving cross-border settlement efficiency, strengthening the hedging of foreign exchange risks, and enhancing the insurance sector's services for export companies.

China will further optimize the management and operation of foreign exchange business, and encourage corporate groups to establish fund pools in Shanghai to achieve efficient onshore management and use of global funds.

The country will also promote financial institutions to enhance their capacity to provide digital services, and support them to improve services for enterprises to expand abroad by leveraging technologies such as blockchain.

Efforts will be made to enhance the functionality and global coverage of the Cross-Border Interbank Payment System and encourage more banks to participate in the system, according to the plan.

The plan underscored the need to develop diversified products and services to hedge against foreign exchange risks, and the promoting of cross-border use of the Chinese currency renminbi.

China will increase insurance support for key export enterprises such as domestic commercial aircraft and new energy vehicle companies, and promote collaboration between insurance companies and reinsurance firms to establish insurance consortiums — thereby enhancing their capacity to cover special risks, according to the plan.