Yicai:

Shanghai is becoming an open center for RMB asset allocation. What new measures will the PBC take to promote the two-way opening of financial markets and two-way cross-border RMB capital flow? What role will Shanghai play in this process? Thank you.

Wang Xin:

Thank you for your questions. In recent years, China has continuously promoted the opening of its financial sector in a market-oriented, law-based, and internationalized manner. This is reflected in several recent aspects. First, we have been promoting high-level opening up for bond markets, stock markets, foreign exchange markets, commodity futures markets, and financial derivatives markets. Second, we have been lifting restrictions on the proportion of foreign shares held in banks, securities, funds, futures, and personal insurance. Third, we have been easing access restrictions in areas such as corporate credit investigation, rating, and payment.

With the development of the financial market, China's bonds and stocks have been included in many international mainstream indexes such as MSCI, Bloomberg, JPMorgan Chase & Co, and FTSE Russell. An increasing number of foreign investors have a growing willingness to hold more RMB financial assets. We have continuously expanded cross-border investment and financing channels, improved relevant institutional arrangements, and provided convenience for overseas investment to flow into the market, forming a multi-channel and two-way open framework featuring direct market entry and interconnection mechanism. Shanghai is gradually improving its functions as a global center for RMB assets allocation, pricing, and risk management.

As global demands for RMB assets increase steadily, there will be more calls to improve risk management, the legal environment, and talent supply for handling RMB assets. Shanghai will become a hub for RMB asset allocation, risk management, and fintech development, a model city for best-in-class business environment and a preferred destination for financial professionals with enhanced competitiveness as an international financial center.

For the next step, the PBC will continue to support Shanghai's international financial center initiative. It will also support Shanghai in further improving systems of the financial market, products, institutions, and financial infrastructure, and in strengthening its role in global financial resource allocation. Meanwhile, it will support Shanghai to take the lead in the free exchange of RMB. Upholding three principles of conducting business and preventing money laundering, terrorist financing, and tax evasion, we will further facilitate the corporate trade and investment funds to flow in and out, explore the free flow and convertibility of capital in the Lingang New Area of Shanghai Pilot FTZ. In these ways, we will contribute to building Shanghai into an important hub and bridge linking the international and domestic markets under the new development paradigm.