Shanghai - China intends to establish Shanghai as the global
centre for yuan trading, clearing and pricing over the next three years as part
of broader plans to make the commercial hub an international financial centre
by 2020.
The plan for Shanghai's financial innovations through 2015,
published jointly by the country's economic planning agency and the Shanghai
government on Monday, set goals on a wide range of areas aimed at further
developing Shanghai, though some analysts said many of them appeared ambitious.
"This anticipated pace of development looks a bit quick
to me," said Frances Cheung, a strategist at Credit Agricole in Hong Kong.
China wants to transform Shanghai into an international
financial centre on par with the likes of New York and London by 2020. That
goal was set in 2009 by the State Council and analysts have taken it as a broad
deadline for liberalising the currency.
The state economic planning agency, the National Development
and Reform Commission, outlined a series of goals under the 2015 yuan plan.
These included making the daily yuan mid-point published by
the central bank in the onshore yuan market serve as the benchmark for both
domestic and foreign yuan trading markets.
Currency traders interpreted the statement partly as a
message from Beijing that the yuan's movements, which have increasingly been
influenced by the offshore market over the past few months, should be decided
by the government.
"There have been recent developments that have put Hong
Kong's offshore market in the spotlight from time to time, such as its pricing
of the yuan quite differently from the onshore market," said a trader at a
European bank in Shanghai.
"In this sense, the NDRC statement is published at a
sensitive time and means the government once again wants to emphasise that it
has the final say in the value of the yuan."
The plan also aims to make the government-backed Shanghai
Interbank Offered Rate (Shibor) the benchmark for yuan credit everywhere and
targeting to more than double the annual non-forex financial market trading
volume to 1 000 trillion yuan by 2015.
While the plan lacked details on how China would achieve
these targets, analysts were sceptical on the feasibility of some of the planks
in the platform.
"Shibor is not even a very well established benchmark
onshore," Cheung said. Markets currently use the government's seven-day
repurchase rate as the lending benchmark.
Analysts said the NDRC's plan gave no fresh insight into how
quickly China would liberalise its capital account, a crucial step in
Shanghai's attempt to become a global money hub.
China has taken a series of measures over the past two years
to invigorate the offshore yuan market in Hong Kong as part of a longer-term
plan to promote the use of the yuan overseas and make it a fully-convertible
and international reserve currency along with the US dollar.
Earlier this month, Britain said it was teaming up with its
former colony to secure London a top spot as an offshore trading centre for the
yuan.
The NDRC's plan would not threaten Hong Kong's current
position as the main offshore yuan centre, analysts said.
"Promoting Shanghai as an onshore yuan centre
complements Hong Kong's growing role as an offshore yuan center, and should
help to strengthen the circle of onshore-offshore yuan flows underpinning the
yuan trade settlement process," said Donna H J Kwok, economist at HSBC in
Hong Kong.
China will also encourage overseas companies to sell
yuan-denominated shares in its domestic stock markets, but the plan did not
give a detailed timetable.
Authorities have been discussing launching a so-called "international
board" on the Shanghai stock exchange for listing foreign companies'
shares, seen as a centrepiece for the 2020 goal, but the city's mayor said this
month that the time was not currently right for its launch.
Shanghai will explore M&A opportunities involving
overseas stock exchanges to increase its global clout, the NDRC's plan said
without elaborating.