China Businesses Benefit from Loosening of Offshore Trade Policies

Reading into China's 15th Five-Year Plan

China's 15th Five-Year Plan (2026-2030) will be adopted at the ongoing Two Sessions. The plan outlines how the nation will move to achieve basic modernization by 2035, amidst a more disquieting global environment as well as China's efforts to become more self-reliant in technology and improving living standards. This series provides insights into the nation's vision in various sectors.

For some businesses, financial innovation is icing on the cake. But for Lu Zhen, vice general manager of Huamei (Shanghai) International Trade Co, it's the cake itself.

Established last year, the company, which conducts commodity offshore trading, said it has survived global challenges thanks to financial innovation in real-time fund transfers.

In trial operations in Shanghai's Lingang Special Area authorized companies are allowed to set up "free trade accounts," enabling faster processing and risk controls.

In Lu's case, his company is exempt from requirements of case-by-case checks of contracts, invoices and bills of lading used in traditional offshore trading, which usually take two to three days.

"For commodities with sharp price fluctuations, even a one-day delay in fund receipts can lead to loss of hundreds of thousands of yuan," Lu said. "The new policy can help us respond flexibly to the market changes and has significantly expanded our business scale."

The trials also include cross-border settlement in digital yuan, the issuance of corporate bonds in offshore markets and more financial support for companies to conduct offshore mergers and acquisitions.

Banks that include the Shanghai branches of Industrial and Commercial Bank, Pudong Development Bank, Rural Commercial Bank, China Merchants Bank and Citic Bank Shanghai have participated in the trials.

"The opening-up of the banking and financial sector is an important part of China's overall reforms," Pan Gongsheng, governor of China's central bank, said on the sidelines of the ongoing twin meetings of the National People's Congress and its advisory consultative body.

"Since 2025, the People's Bank of China has actively accelerated high-level opening-up of the financial sector, balanced expansion and financial security," Pan said.

Shanghai's pioneering policies in Lingang serve as guidance for broader applications in China's vast market.

Last year, the People's Bank of China, together with other financial regulatory authorities, allowed some foreign banks to serve as yuan clearing banks, with more than 170 billion yuan (US$24 billion) of panda bonds issued in 2025, a 34-percent increase. The bonds are yuan-denominated debt issued on the Chinese mainland by foreign institutions. At the end of 2025, foreign-owned domestic yuan-denominated financial assets – including stocks, bonds, deposits and loans – exceeded 10 trillion yuan.

Meanwhile, yuan was the largest settlement currency for China's external payments and receipts last year, and the world's second-largest commercial financing currency. The Chinese currency ranked third in weight in the International Monetary Fund's special drawing rights basket of currencies. The IMF has opened an office in Shanghai to promote policy communication and coordination among Asia-Pacific economies.

China has also strengthened cross-border financial alliances with the EU, UK and Canada, and is seeking to strengthen ties with Brazil, Indonesia, the United Arab Emirates, Egypt and South Africa.

Going forward, Pan said the central bank will continue to expand financial opening-up to support the development of China's economy.

"It will be built on the principles of market orientation, law-based governance and international standards, with enhanced transparency, stability and predictability," he said. "We will support the development of Shanghai as an international financial center and the elevation of Hong Kong's status as an international financial hub."