Hony among first batch of companies to set up in Shanghai free trade zone

The Shanghai FTZ, which covers an area of nearly 28.78 square kilometers, claims to offer world-class transportation and communication facilities as well as a tax-free environment. It will also be a pilot project for renminbi covertibility and exchange rate liberalization.

John Zhao, Hony's CEO, told local media that the FTZ will be beneficial for cross-border investment. It will be a crucial place for China's experiments in financial reform and market opening, as well as in establishing market-oriented systems, he added.

A total of 25 companies have won licenses to start operations in the FTZ. They include logistics providers, international trading companies, and asset management firms, alongside 11 financial institutions, most of which are domestic banks. Citibank and DBS are the only foreign banks.

A similar scheme launched last year in Shenzhen's Qianhai Economic Zone that so far has failed to meet expectations. It is being primed as China's next global financial services hub, allowing reniminbi to flow freely across the boundary with Hong Kong.

Hony Capital, alongside with other private equity players, expressed their interest in raising offshore renminbi fund in Qianhai. 

But there remains a lot of talks and little action. There is a lack of clarity as to what can be done with capital once it gets there, industry players said.

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• Topics
• Greater China
• Financials
• Fundraising
• China
• Hony Capital
• Financial Services
• Fundraising