A view of Shanghai Photo: VCG

Shanghai introduced new measures on Thursday to free foreign exchange and attract foreign investment, and Beijing launched a consultation on a similar policy. These measures are in line with a series of initiatives by the Chinese government to facilitate foreign investment.

The Shanghai Municipal People's Government has announced that it will permit free inward and outward remittances for all transactions associated with foreign investments in the Shanghai Pilot Free Trade Zone (SFTZ) and the Lin-Gang Special Area, provided they are real and in compliance with the law.

Shanghai will permit all lawful transfers related to foreign investment in the SFTZ and Lin-Gang New Area to be freely remitted in and out of Shanghai without delay.

The foreign exchange policy relates to salary income and other legitimate income of foreign employees of foreign-backed enterprises, it also includes employees of Hong Kong, Macao and Taiwan companies. No unit or individual may unlawfully impose restrictions on the currency, amount and frequency of inward and outward remittances.

The policy is a follow up to the announcement on June 29 by China's State Council about implementing international high standards for FTZs. The Shanghai FTZ is the first in the country to implement such a policy.

In the past, foreign exchange remittance required approval from the foreign exchange bureau and banks. So the greater freedom offered by the new policy will surely help to attract foreign investment, Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Thursday.

On Monday, China's central bank and top foreign exchange regulator vowed that China will continue to open up its market for global businesses. Several representatives of multinational financial institutions expressed the hope that further efforts will be made to continuously improve the business environment.

Despite skepticism from some Western media reports, foreign companies remain confident in the Chinese market. On Wednesday, Swire Coca-Cola announced a 2 billion yuan ($270 million) investment in Suzhou, East China's Jiangsu Province, and the city also secured a 1 billion yuan investment from Adidas on the same day.

Global Times