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[SINGAPORE] Clinching a front-row seat in China's drive to reform its economy will significantly boost DBS Bank's business in the world's second-largest economy, bankers said yesterday, as the Singapore bank enters the newly established China (Shanghai) Pilot Free Trade Zone (FTZ).儲存DBS and Citibank were two foreign banks, along with eight domestic ones, to get approval on Sunday from the China Banking Regulatory Commission Shanghai Bureau to set up in the new FTZ.The zone, which covers 29 square kilometres, "started operating" on Sunday, Xinhua news agency said, adding that it was "a test bed for the leadership's drive for deepening market-oriented reforms and boosting economic vigour". Restrictions on foreign investment will be eased inside the area, which will also loosen controls on 18 service sectors ranging from finance and shipping to cultural services.Premier Li Keqiang, who did not attend Sunday's opening ceremony, has signalled he may later implement such free-market policies more broadly throughout the economy.DBS China will open a sub-branch within six months, initially focusing on servicing corporate clients in the FTZ, said Neil Ge, DBS Bank (China) chief executive. "Long term the contribution will be significant to our China franchise," he added, when asked about the impact the FTZ will have on DBS.China is DBS' third-largest market after Singapore and Hong Kong. DBS opened its representative office in Beijing in 1993 and was among the initial group of foreign banks and the first Singapore bank to be incorporated in China in May 2007. Since then, it has expanded its network across the country, operating out of 10 branches and 19 sub-branches, and grown its customer base by 10 times.With a staff strength of over 2,000, DBS China's operations cover institutional banking, global transaction services, treasury and markets, SME (small and medium enterprise) banking as well as consumer banking.DBS is busy now refining products and services it will unveil儲存倉when operations start, Mr Ge said. "Meanwhile, we will promote the FTZ to DBS' broader Asian client base," he added.DBS expects products such as cash management for multinational corporations (MNCs) and capital-market offerings to take off, said Tan Teck Long, DBS Bank (China) managing director and head of institutional banking group.Presently with currency restrictions, cash management services are not efficient, said Mr Tan. Banks operating in the FTZ will face few restrictions as China pushes its yuan convertibility programme, opening of its capital account as well as interest rate liberalisation.He added that DBS will also offer capital-market products such as bonds and equities. And with interest rate market reform, there will be demand for more sophisticated interest rate products, he said.While there is some excitement over the potential of the FTZ, others caution about tempering expectations, citing competition from other China FTZs such as Qianhai.Qianhai is mainly about attracting Hong Kong lenders to Southern China while the Shanghai FTZ is part of the progressive evolution in the opening of China's economy, said Mr Ge.On what the Shanghai FTZ means to Singapore, he noted that Singapore is an established financial centre serving the region and stands to gain from increased trade flows between China and South-east Asia as more opportunities open up for investors and corporates.The official launch of the FTZ yesterday is likely to trigger a new wave of reforms and liberalisation in the coming years, said an HSBC report. This is comparable to the Special Economic Zone in the early 1980s and the Pudong Development Zone in the early 1990s, it said.Top reforms to be tested cover six areas ranging from cutting administrative red tape to financial liberalisation. And these reforms are likely to be rolled out nationwide within three years, fuelling the momentum of ongoing reforms."All this will lead to a chain reaction in financial markets in the coming years."迷你倉最平