(Yicai) Sept. 22 -- Shanghai aims to further ensure foreign financial institutions are treated equally to domestic ones ahead of the 10th anniversary of the China Shanghai Pilot Free Trade Zone.

The local government issued a document yesterday to urge financial administrations to treat offshore financial enterprises fairly. 

For example, if a foreign company seeks to pursue a new type of business that has been done by a Chinese firm in the Shanghai FTZ or the Lingang New Area, administrations need to make a decision without any delay and inform the applicant no later than in 120 days given that the application is complete.

Financial administrations must follow the same rules to review applications by foreign and Chinese financial institutions, refine their examination procedures, and raise efficiency, the document noted. It added that companies registered and individuals working or living in the Shanghai FTZ or the Lingang New Area will be allowed to buy cross-border financial services such as insurance and investment.

The two special areas will steadily further the opening-up of rules, systems, management, and standards based on the highest principles and national strategy. They will implement pilot reform measures in trade in goods and services, digital trade, temporary entry of business people, and improve the business environment in the following year.

The FTZ has national importance. In 10 years since the start, FTZ has become a cluster of banking and insurance as the area had 588 banking institutions and 135 insurers as of June 30, according to the Shanghai Banking Association and the Shanghai Insurance Association.

As of June 30, some 49 banks in the FTZ have formed free trade accounting units, and assets on these accounts totaled CNY1.06 trillion (USD145.2 billion), Wang Xinze, deputy head of the municipal financial regulator, said during a briefing this week. FTUs help corporate clients manage cross-border currency risks.

The Shanghai FTZ was formed in the Pudong district in September 2013. The zone has attracted many firsts for China including the No. 1 foreign reinsurance brokerage, the first foreign legal person at a reinsurance institution, the first wholly foreign-owned insurance company, and the first foreign insurance brokerage agency approved to expand its business scope.

The FTZ has been experimenting with new policies to accelerate China’s financial innovation. The Lingang New Area, which was added to the Shanghai FTZ in August 2019, is expected to become an emerging financial center for integration and cooperative governance, and its financial sector targets an annual growth rate of more than 25 percent by 2025, according to a document released in August 2022.

Editors: Tang Shihua, Emmi Laine