In a landmark move guided by the People's Bank of China, the Lin-gang Special Area has launched a pilot program to enable real-time fund settlement for offshore trade.

Offshore trade, which involves transactions for goods that do not physically enter China's customs territory, previously required banks to manually verify contracts, invoices, and bills of lading, as well as confirm the transfer of product ownership. The process typically took two to three working days.

Under the new framework, designated banks can now settle funds in real time based solely on payment instructions, without checking supporting documents. The shift significantly improves efficiency and brings Lin-gang in line with the global best practices.

To qualify, companies must set up a dedicated offshore trade subsidiary in Lin-gang. Once reviewed and recommended by the Lin-gang Special Area Administration, eligible firms are included in a "white list" and granted access to free trade enterprise accounts through pilot banks. This pre-approval mechanism lowers risk while easing the administrative burden on banks.

Peng Yu, a researcher at the Institute of World Economy of the Shanghai Academy of Social Sciences, noted that the structure clearly separates offshore trade operations from domestic financial activity, preventing risks from spilling into the domestic system.

Complementing the reform, preferential stamp duty policies introduced in April 2024 within the Shanghai Free Trade Zone resulted in 182 million yuan ($25.34 million) in tax relief for 377 enterprises — further stimulating offshore trade activity.

The reform's impact has been immediate. Lin-gang's offshore trade volume reached 24.78 billion yuan in 2024, up 87.5 percent year-on-year. That momentum has continued into 2025, with around 8.14 billion yuan recorded in the first quarter alone, a 56.67 percent increase from the same period last year.

Source: Jiefang Daily