Foreign currency control in the city's State-level special export
processing zones will be liberalized thanks to new rules introduced
by the People's Bank of China's (PBOC) Shanghai branch.
So
far, the regulations only apply to Shanghai Songjiang Export
Processing Zone, which the State Council approved as a State-level
zone with its own customs system.
The rules have not yet been applied to two other special export
processing zones -- Waigaoqiao Free Trade Zone and Jinqiao Export
Processing Zone.
The reason, according to one official from the foreign currency
administration section of the PBOC's Shanghai branch, is that
companies in the Waigaoqiao zone are more complex than those in the
Songjiang zone. The Jinqiao Export Processing Zone has not been
included because it does not yet have a separate customs
system.
"However, we expect there will be more export processing zones like
the Songjiang one in the future, to which the new rules will be
applied,'' he said.
Jinqiao Export Processing Zone is now applying for the same status
as Songjiang, he added.
The new specifications say that all companies in the zone, either
Chinese and foreign, will be able to open foreign currency
accounts, for which Chinese companies used to be excluded.
This will give Chinese firms greater ability to carry out
international trade.
Companies in the export processing zone will also be allowed to
open only one foreign currency account. Previously, they had to
have two for different businesses.
The purpose of requiring two accounts was to give the government
better supervision of the flow of foreign currency, the spokesman
said.
"But this caused a lot of trouble,'' said Zhang Yanping of
Waigaoqiao SU-Development Co Ltd. He said many foreign companies in
Waigaoqiao had complained about that situation.
Companies inside the zone have also been given new rights, such as
a new rule which means that companies established with renminbi
investment are also allowed to purchase foreign currencies with
proper certificates.
"They can also ask for loans from foreign organizations without the
need to get approval from the PBOC in advance,'' said the PBOC
spokesman.
(China Daily 04/14/2001)