Shanghai to trial renminbi convertibility

Intends to to test convertibility at the Qianhai zone.

Shanghai expects to receive government approval to open a free trade zone that will test renminbi convertibility and cross-border capital flows. The zone will allow Shanghai to experiment with capital account liberalization and renminbi convertibility.

China's financial center fears that it could be left behind as rival financial hubs such as Hong Kong and Taiwan develop cross-border renminbi financial services.

The Qianhai zone administered by the People's Bank of China allows banks from Hong Kong to offer cross-border renminbi-denominated loans to mainland companies in the zone.

The zone is expected to be approved in July and will be located near China's existing Waigaoqiao free trade zone in Pudong district.