Shanghai plans to become a global center for yuan trading by 2015, open its markets wider to foreign investors and almost triple non-currency financial transactions.
The city will allow “significantly more” foreign participation in its financial markets, according to the plan jointly published by the National Development and Reform Commission and the Shanghai government yesterday. Shanghai aims to have about 1,000 trillion yuan ($158 trillion) in financial trading, excluding the currency transactions, by 2015, compared with 386.2 trillion yuan in 2010, the plan said.
Shanghai’s currency market is now largely limited to domestic clients because of controls on capital flows and Hong Kong has been allowed to start an offshore market for trading the yuan. Buyers of yuan still need to seek approval to bring the currency into mainland China for investment purposes.
The Shanghai interbank offered rate will become the benchmark interest rate for pricing yuan-denominated assets at home and abroad, while the yuan reference rate will become the key exchange rate, according to the plan. China said in March 2009 it aimed to make Shanghai a world financial center commensurate with the nation’s economic strength by 2020.
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