China has introduced fresh measures to accelerate Shanghai's transformation into a global financial hub and boost the international use of the yuan, according to a report by the South China Morning Post on Wednesday.
New Pilot Program for Offshore-Yuan Trading
Speaking at the annual Lujiazui Forum in Shanghai, People's Bank of China Governor Pan Gongsheng announced that authorities would launch a pilot program for offshore-yuan foreign-exchange trading in the city. This initiative is designed to support the two-way opening of China's financial markets and help Shanghai become a global center for yuan asset allocation and risk management.
Repurchase Facilities for Overseas Central Banks
Pan also revealed that the central bank would establish repurchase facilities for overseas central banks and monetary authorities. These facilities would allow them to use high-grade assets, such as Chinese government bonds, in repurchase agreements. The move aims to support yuan liquidity management and encourage foreign institutions to hold and trade yuan-denominated assets.
Authorized Banks for Offshore-Yuan Trading
Under the plan, six Chinese lenders will be authorized to conduct offshore-yuan foreign-exchange trading in the Shanghai Free Trade Zone through the China Foreign Exchange Trade System. The banks include Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Citic Bank.
Shanghai's Role in Financial Reforms
Top Chinese financial regulators used the forum to emphasize Shanghai's role as a key channel for offshore finance and foreign participation in China's domestic markets. The measures come as Beijing seeks to strengthen the yuan's global role and present China's financial system as a source of stability amid global market volatility.
Shanghai has long been central to China's efforts to deepen capital-market reforms, attract foreign financial institutions, and expand cross-border yuan settlement. Chinese officials have increasingly promoted the yuan's international use in trade, investment, and reserve management, particularly as emerging economies seek alternatives to dollar-dominated financial channels.
