Overseas banks have given Shanghai’s much-hyped free-trade zone a chilly reception – Sunday’s launch included just two branches of non-Chinese institutions.
The slow start for the zone contrasts with the high expectations for its future, with analysts saying it could herald the most ambitious push for financial reforms in China in more than a decade. The Chinese government has declared that it wants to use the zone – a small 28 square kilometers sliver of Shanghai – as a test bed for policies from interest rate liberalization to capital account opening.
But the tepid reaction of foreign banks so far reflects widespread confusion about how the zone will operate, even as regulators have appealed for patience.
A banking regulator familiar with the approval process told the Financial Times that very few applications had been submitted and virtually all of the banks that had applied were accepted.
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