Another Step in China’s Financial Liberalization

Government tries out regulatory changes within Shanghai Free Trade Zone.

China took another step toward liberalizing its financial regulations last fall by establishing the Shanghai Free Trade Zone, which now serves as a laboratory for trying out new rules and regulations for doing business in China.

Chinese regulators have proposed regulatory changes within the zone affecting everything from the interest rate paid on deposits to customs processes and cross-border pooling.

FX Volatility

Amid the regulatory changes, the Chinese renminbi—which had gained steadily against the U.S. dollar in recent years—weakened dramatically earlier this year. And in March, the PBOC widened the band in which the RMB trades against the dollar from 1% to 2%.

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