Beijing: Shanghai's mayor yesterday pledged to make major progress this year on key financial reforms in the city's new free-trade zone (FTZ) including full convertibility of China's currency.
China set up the FTZ in the commercial hub in September last year, promising to make the zone a showcase for financial reforms, which have slowed over the last decade.
"We will make all-out efforts to build the FTZ," mayor Yang Xiong told lawmakers at the annual meeting of the city's legislature.
"To intensify opening up and innovation in the financial sector... we will seek substantive progress with pilot reforms," he said in a speech.
He said these reforms included convertibility of the yuan currency under the capital account, cross-border settlement of the yuan and interest rate liberalisation.
China keeps a tight grip on its capital account — investment and financial transactions, rather than those related to trade — on worries that unpredictable inflows or outflows could harm the economy and reduce its control over it.
Convertibility of the yuan — allowing the currency to be freely bought and sold, and with it the movement of funds into and out of China — is the main obstacle preventing Shanghai from competing with global financial centres such as New York and London.
China currently sets deposit rates by administrative order, but the central bank began allowing banks to decide their own lending rates last year, in a long-awaited move. Yang said the government would also revise a 'negative list' of what is barred in the free-trade zone in a timely way.
The list was sharply criticised for being too long and restrictive and officials say a new one will be announced for this year. Shanghai would also work towards the launch of crude oil futures, Yang said, but gave no launch date.
Officials have previously said the futures product would be offered through the FTZ. Shanghai also planned to 'gear up' for the start of operations of a new Disney theme park in the city, Yang said.
City officials earlier this month reaffirmed a deadline for the opening of the park to visitors in 2015. The park will be the second in China after another in its special administrative region of Hong Kong.