During the 2026 Lujiazui Forum, six Chinese government agencies, including the People's Bank of China (PBOC), jointly released the "Action Plan for Developing Offshore Finance in Shanghai International Financial Center," setting out plans to make Shanghai the first city in China to establish an offshore financial system commensurate with its role as an international financial center.

The plan is the first comprehensive policy document outlining how Shanghai will build its offshore financial system, marking the transition from institutional design to deeper implementation of offshore financial reform.

Foreign financial institutions have long been essential participants in China's offshore financial development. Over the years, they have played an active role in building the Shanghai International Financial Center, expanding their presence in cross-border investment and financing, global treasury operations, and cross-border risk hedging, while building strong capabilities and an impressive track record.

The new policy has been met with a positive response from foreign financial institutions. At a recent seminar on Shanghai's new offshore finance initiative and the business environment for foreign financial institutions, hosted by International Financial News and organized by the Offshore Finance Research Institute of the China Chief Economist Forum, representatives from Standard Chartered, BNP Paribas, Mizuho Bank, Fubon Bank, J.P. Morgan Asset Management, Allianz, AIA Life, Tokio Marine & Nichido Fire Insurance, and Nomura Orient International Securities shared views on practical actions to optimize the business environment and explored new approaches to advancing the development of the Shanghai International Financial Center.

Representatives of the participating foreign financial institutions agreed that the period from 2025 to 2030 marks a critical window for the reshaping of the Asia-Pacific offshore financial landscape and that Shanghai is well positioned to accelerate the development of its offshore financial system. Building on their presence in Shanghai, they said they would ramp up investment in talent, systems, and global resources. In the near term, they plan to expand four well-established business areas: offshore trade, offshore bonds under the Shanghai Free Trade Zone framework, offshore reinsurance, and global treasury management. Over the longer term, they will enhance capabilities in offshore derivatives, comprehensive offshore applications of e-CNY, integrated cross-sector offshore service technologies, as well as talent development and client resources.

Officials from the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone also outlined implementation rules for pilot programs covering offshore trade, offshore reinsurance, and offshore leasing. They introduced supporting policy measures and explained reforms to optimize regulatory arrangements for cross-border business, including streamlined oversight for transactions across the domestic boundary and further liberalization of cross-border business at the international boundary, providing foreign financial institutions with clearer pathways to expand their offshore operations.

Drawing on their long-standing experience in Shanghai, representatives of foreign financial institutions also offered policy recommendations. Discussions focused on launching pilot programs in Shanghai for well-developed and compliant offshore businesses already operating in Hong Kong, repealing or revising outdated provisions incompatible with institutional opening-up, upgrading the functionality of offshore account systems, and reducing operating costs for smaller financial institutions.

Shuai Shi, executive deputy secretary-general of the Shanghai Financial Association, said improving the business environment for foreign financial institutions remains one of the association's key priorities. He said the association will leverage its role as a bridge between regulators and market players by establishing a long-term communication mechanism for foreign financial institutions operating in Shanghai and augmenting coordination among stakeholders to better support their continued growth in the city and China, while contributing to the high-quality development of the Shanghai International Financial Center.