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Multinational Companies Benefit From FTZ Policies In China

It's been more than six months since the Shanghai Pilot Free Trade Zone expanded. Officials say the financial sector in the zone witnessed a 30 percent jump in volume in the first nine months of this year compared to the same period of 2014.

Dennis Liu works as a financial officer at a multinational electronics company in Zhangjiang Hi-Tech Park. He says thanks to the zone's cross-border RMB cash transfer system, his company can easily send money to its overseas branches. The company has already saved four million yuan in bank interest because of the policy. The company's revenue through the first 10 months of this year has already surpassed last year's total.

"Our company in the free trade zone can allocate funds to our overseas branches any time now. Previously, you had to go through many complicated procedures. It was so complicated that our overseas branches had to get loans from overseas financial organizations, which was never a guarantee and increased costs," Liu said.

Another company in Lujiazui also says the cross-border transfer system saves time.

"If we didn't have such a mechanism, it would require many procedures to get approval for a cash transfer. It could take a week, and in some cases even a month. You also had to submit many documents to prove you needed to transfer the money to make transactions abroad," said Zhang Yuepeng, from Dover Corporation, China.

The number of financial service companies in the pilot free trade zone has increased to over 1,800 with 40 percent of them having opened this year. The city has also announced plans to allow individuals in the zone to directly purchase overseas assets. Presently they can only do that through third parties such as banks and securities firms.

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