(Yicai Global) Aug. 30 -- China will widen the yuan convertibility pilot of the Qianhai free trade zone, part of the Guangdong FTZ group, to the whole city of Shenzhen, in order to advance capital account liberalization.
Pilot firms will not need to provide documentation about each foreign exchange transaction regarding their capital accounts and, instead, banks may do random inspections, the State Administration of Foreign Exchange announced on its website yesterday. Capital account items in this context could, for example, involve funds secured by going public overseas or debt.
The Qianhai zone has spearheaded the yuan convertibility reform since its establishment in 2010. China has stipulated earlier that pilot firms must be non-financial companies registered in experimental areas, excluding real estate firms and government's financing platforms.
Banks have made review procedures of such business in Qianhai much shorter by requiring only one document from companies, and this has improved the pilot firms' financial health, Yicai Global learned.
Editor: Emmi Laine