China unveils new financial policies to further open up Hainan province

China unveils new financial policies to further open up Hainan province

The measures added to a batch of supportive policies China announced on Thursday to expand the pharmaceutical, new energy vehicles, gaming and aerospace sectors in the province.

Last June, China gave the status of a “free trade port” to Hainan, which it aims to make fully functional by 2035, building an offshore centre of trade and finance to streamline the flow of commodities, capital and talent.

The policies announced on Friday will allow qualified non-residents to purchase properties in Hainan, and consider further relaxing restrictions on personal use of foreign exchange for residents, the People’s Bank of China (PBOC) said in a joint statement with other financial regulators.

Qualified non-bank financial institutions will also be allowed to participate in the interbank foreign exchange market, the statement added.

To enhance foreign participation in Hainan’s financial sector, regulators will also support the establishment of joint-venture banks, allow the set-up of Qualified Foreign Limited Partners (QFLP), a form of business used for most private equity investments in China, to remit funds freely under certain rules.

Regulators will also grant quotas for the qualified foreign fund managers to raise money in China for overseas investments.

Onshore mobile payment institutions will be supported to conduct business overseas, to allow more regions to use China’s own Cross-Border Interbank Payment System (CIPS) for yuan settlement, it added.

While opening up the financial services in Hainan, regulators said they will steadily push for oversight and control of risks, build a cross-border monitoring system of capital flows, and assess the risks of money laundering and terrorism financing on a regular basis.

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