Capital Account Liberalization And Offshore Market Financial Shanghai Free Trade Experimental Area

China (Shanghai) pilot free trade zone was formally established, which represents China’s capital account liberalization and developing offshore financial market entered a new phase. At present, China is actively exploring the road of capital account liberalization and domestic offshore financial market development.In current situation, China is facing with more and more challenges from how to integrate into the global economic environment. After analysis the background, development status, opportunities and challenges in the future development of the capital account liberalization and offshore financial market in Shanghai pilot free trade zone, this paper is trying to give some suggestion toward future financial reforms.The conclusion is that China should gradually improve its domestic financial system and regulatory system first, only after that, China can gradually accelerate the speed of capital account liberalization and the development of offshore financial market. For the speed of the reforms, the paper considers the capital account liberalization, especially short-term capital flows should be opened carefully, there is no need to accelerate the speed of capital account liberalization, robust policy is more suitable for China’s current situation; growth rate of offshore financial markets should be based on the speed of other reforms, and at this stage, the onshore and offshore market should be strict and effective isolated. Overall, promote the process of capital account liberalization will help China establish a successfuloffshore financial market. A well supervised capital account liberalizationproceedingand a dynamic offshore financial marketcombine together will produce a virtuous cycle.