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Mapping a course for freer trade, less fraud
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CONTINUED reforms in Shanghai’s financial system are high on the agenda as the city forges ahead with plans to become a global financial and commercial hub.
Those reform proposals include tariff reduction in the city’s pilot Free Trade Zone and tighter scrutiny over fraudulent Internet finance businesses.
The Shanghai Committee of the Chinese People's Political Consultative Conference met recently to refine its agenda for the way forward. Party Secretary Han Zheng and regulators like the Shanghai Municipal Financial Service Office responded to members’ questions, comments and proposals.
Member Wang Liang, deputy director of the conference’s economic committee, said he thinks other free trade zones in China, like the one in Shenzhen, are stealing a march on Shanghai by being bolder in their market-oriented reforms. The result, he said, is more business activity for them.
In response to that concern, Han said the Shanghai zone should really be designated as a “national test area,” not a local free trade zone.
“This relates to the re-creation rather than the reallocation of government functions,” Han said in the panel discussion on Sunday about future plans for the Shanghai pilot Free Trade Zone.
“If people in office don’t have enough revolutionary spirit to relinquish powers, then the reforms won't achieve any success in the end," Han said.
Member Tu Haiming, also president of Shanghai Hodoor Real Estate Development Co, said the Shanghai zone should accelerate deregulation of the customs process, allowing multinational companies to deliver goods to customers within 24 hours instead of current two to three days.
Committee member Fang Huaijin, vice president of the Shanghai International Port Group, suggested that Shanghai should implement a zero tariff policy for companies doing business in the zone and create preferential policies for industrial, manufacturing and shipping companies instead of applying various tax policies on different categories of companies.
Beyond the zone, committee members also expressed concerns about the monitoring of fraudulent online peer-to-peer lenders and the potential risks posed to the development of legitimate financial technology companies if hard-and-fast rules are implemented.
Last January, Shanghai halted registration of new Internet finance companies that used marketing terms like “investment, assets, capital, shares, finance management and lease financing.” Shanghai Daily earlier reported after seeing the document.
The registration squeeze was followed by a national raid of online Ponzi schemes that bilked elderly people of hundreds of millions of yuan of life savings in 2015 to 2016.
Such raids shouldn’t affect the normal business operations of smaller financial companies or venture capital firms, wrote committee member Hong Zhongxin, chief executive officer of K-Boxing Men's Wear Co, in a proposal.
“A large number of start-ups, especially privately owned companies that lack access to mainstream fundraising channels, find it harder to attract capital from venture funds,” Hong said. “That goes against the municipal government’s strategy of building Shanghai into an international financial hub.”
Xie Dong, vice director of Shanghai Municipal Financial Service Office, told Shanghai Daily that the duration of current national raids is governed by outcome and not a specific time period.
“How to control the financial risks posed by fraudulent loan companies remains the most difficult and crucial part of our work,” Xie said. “We have allocated funds for the education of investors to try to head off these scams, both in communities and campuses.”
During the five-day annual session of the consultative conference, committee members submitted 106 proposals related to the economy.
The session ended yesterday.
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