Free trade zone opens offshore trade service center
The China (Shanghai) Pilot Free Trade Zone launched a new service center, called the Leading Demonstration Zone for Offshore Trade, on Thursday to provide facilities for companies in the zone that wish to conduct offshore trade.
The Pudong New Area issued seven new policies in favor of offshore trade to support the service center. Ten companies signed agreements with local banks to cooperate on fund settlement and currency exchange.
Offshore trading usually refers to investment in the global market from a trading or brokerage account that is located in an offshore jurisdiction.
As more multinational enterprises set up headquarters in Shanghai, and many local companies try to establish businesses overseas, the importance of offshore trading is becoming increasingly prominent.
Orient International Holding Shanghai Knitwear Import and Export Co Ltd, which is registered in the free trade zone, is a major exporter of clothing and textiles. Jin Wei, vice general manager of the company, said it has built a factory in Dhaka, capital of Bangladesh, which brings in considerable orders every year.
As the goods from the factory are made by a Chinese company but on foreign soil, and they will eventually be sold in other foreign markets, the company's demand for offshore fund settlement has became increasingly pressing.
Jin said he hoped the government will create new policies to make settlement more convenient.
Wang Hua, deputy director of the free trade zone, said one of the seven new policies is about providing better financing services for offshore trading. The State Administration of Foreign Exchange will coordinate with the banks on receipts and disbursements as well as currency exchange.
The policies will also offer tax preferences and bonuses to offshore trading companies. For companies making tremendous economic contributions or heavy investments, the free trade zone will consider further accommodating policies.