A WORLD OF ENTERTAINMENT: A visitor tries a game machine at the 2014 China International Amusement Facilities Equipment Exposition held in Beijing from March 26-28 (ZHAO BING)

New Reform Measures

Rules on the implementation of the free trade account system that enables full convertibility of the Chinese currency and allows offshore financing in the China (Shanghai) Pilot Free Trade Zone (FTZ) will be rolled out before the end of June, an official said on March 25.

The account will help Chinese companies, especially those engaged in foreign trade, secure cheaper yuan-denominated funding from offshore, where financing costs have been lower than that on the Chinese mainland.

"We hope to have the account in place by the end of the first half of this year," said Dai Haibo, deputy director of the Shanghai FTZ administrative committee.

China's central bank previously eased restrictions on overseas investment by individuals by allowing those working in the zone to open an account for overseas investment.

Nearly six months after it was established last September, the Shanghai FTZ has launched pilot schemes to advance financial reforms. Key programs include easing the cross-border use of the Chinese yuan, liberalizing interest rates on foreign currency loans, and facilitating offshore financing and outbound investment.

Offshore RMB Trading

The Bank of England and the People's Bank of China (PBC) are to sign an agreement on renminbi clearing and settlement in London on March 31. A designated clearing bank will be named "soon," the UK Treasury said on March 26.

The change will allow investors to cut the risk from making overseas payments in the Chinese currency. It also burnishes London's position as the global center for foreign exchange trading as China's rise shifts international financial flows.

Historically, economic links between China and Europe have been centered on trade, but as China's wealth grows, and its authorities move to liberalize currency and capital markets, financial centers in Europe are targeting investment. The UK is determined to defend its role as the main offshore renminbi trading center outside Asia.

Slower Growth

China International Capital Corp. (CICC) expects the nation's economic growth to slow to 7.3 percent in 2014 due to multiple downward factors.

The investment bank attributes the "weakened growth momentum" mainly to the restraining effects of economic restructuring and financial risk control on demand.

The figure was lower than the previous 7.6 percent forecast by the investment bank earlier this year.

CICC also cut the economic growth forecast for the first quarter from the previous 7.8 percent to 7.3 percent.

In the short term, it is difficult for macroeconomic policies to strike a balance between readjusting the economy and maintaining growth, leading to persistent downward pressure on the growth of demand, according to its quarterly report.

As GDP growth is no longer its top priority, the government would not adopt full-scale monetary easing policies, said the report. The authorities' determination to rein in financial risk will also dent investment, with the negative effects already emerging, said the report.

More Convenient Access

Shanghai Pudong New Area's approval process for foreign businesses has shortened to two days, following the government's call to streamline the administrative process and vitalize market forces.

Shanghai's Pudong New Area will halve the approval period to two days for the establishment and adjustment of projects backed by foreign capital, according to a report by Xinhua News Agency on March 26.

This will make Pudong, one of the country's earliest reform testing-grounds, the fastest hub to provide market access to multinational companies.

The policy will also beat the record of a minimum four days for a company to receive business licenses in the China (Shanghai) Pilot Free Trade Zone, an initiative to open up the economy and attract foreign investment.