Research On The Offshore Financial Business And Implications To Shanghai Free Trade Zone

Offshore finance is the product of global economic integration and financial liberalization, an important part of modern international finance. Offshore financial business is flexible in operation, free flow in capital, liberal in policy environment, making it have advantage of low cost, high liquidity, strong competitive. It attracts global investors and transnational capital and has a positive role on the location of economic development. Shanghai Free Trade Zone was set up in September 2013.As an important part of financial reform and innovation, offshore financial business attempt to open a legitimate channel for international capital inflows, explore the path to use the huge foreign exchange reserves effectively, promoting the internationalization of RMB. It is great significance for China’s financial reform and economic development.The paper collates and summarizes the main business and innovation and development of offshore finance, and analyzes the positive and negative influence to host country and trends of offshore finance and the operation of the world’s leading offshore financial centers. The paper analyzes development model, location selection, policy environment, business and trade body of offshore financial business, and international regulation to offshore banking, offshore insurance, offshore securities, and governments’regulation experience in terms of market access, foreign exchange controls and the like. The paper attempts to raise these scattered views to the level of theoretical and systematic research.In combination with the actual situation of China and the Shanghai Free Trade Zone, learning from the experiences of the world offshore business development, the paper suggests that Shanghai FTZ appropriate to adopt the limited penetration in offshore foreign currency and the separation inside and outside in offshore RMB business. With the FTZ offshore markets function gradually improved, offshore financial business will have great development space in financing products, financial settlement products, offshore private banking, offshore and other intermediary business. Financial regulatory authorities need in terms of foreign exchange controls, market access and regulatory measures to improve risk management, improve regulatory effectiveness. Finally, the paper gives policy recommendations for the smooth development ofoffshore financial business in Shanghai FTZ.