On January 29, the People's Bank of China (PBOC) Shanghai Headquarters convened its first-quarter press conference for 2026, detailing Shanghai's financial performance in 2025 and addressing questions from journalists. In attendance were Zhou Peng, Deputy Director of the Monetary and Credit Survey Department; Zhong Lei, Deputy Director of the Foreign Exchange Management Department; and Shi Jiandong, Deputy Director of the Macroprudential Management Department.
In 2025, the PBOC Shanghai Headquarters diligently implemented the central bank's directives and the requirements of the Shanghai Municipal Party Committee and Government. It executed a moderately accommodative monetary policy, advanced the "Five Major Areas of Finance" with high quality, and worked to foster a favorable monetary and financial environment. Driven by these policies, the city's aggregate financing to the real economy (AFRE) increased year-on-year, with a rising proportion of direct financing. Credit expanded at a reasonable pace with an optimized structure, while financing costs remained stable with a slight decline.
AFRE increased year-on-year. The proportion of direct financing rose. For the full year, Shanghai's AFRE increased by 11.632 trillion yuan, an increase of 102.1 billion yuan compared to the previous year, adequately meeting the financing needs of the real economy.
Analyzing the financing structure, RMB loans issued to the real economy increased by 6.589 trillion yuan, accounting for 56.6% of the AFRE increment. Direct financing increased by 3.419 trillion yuan, representing 29.4% of the AFRE increment, a rise of 15 percentage points year-on-year. Within this, net bond financing by various entities reached 2.872 trillion yuan, an increase of 151.7 billion yuan year-on-year; net equity financing by non-financial enterprises was 547 billion yuan, up by 36.9 billion yuan year-on-year. Off-balance-sheet financing, including entrusted loans, trust loans, and undiscounted bankers' acceptances, increased by 735 billion yuan, a significant rise of 148.7 billion yuan compared to the previous year.
The structure of various loans was optimized. Financing costs remained stable with a slight decline. At the end of December, the outstanding balance of loans in local and foreign currencies for the entire city was 130.7 trillion yuan, a year-on-year increase of 6.5%, which was 0.3 percentage points higher than the national average. In terms of increment, loans in local and foreign currencies increased by 7.967 trillion yuan for the full year.
By sector, household loan balances grew by 8.1% year-on-year. Among these, personal housing loans increased by 7.9%. Loans to non-financial enterprises rose by 4.5% year-on-year. Loans to overseas entities surged by 22.9% year-on-year.
In terms of fund allocation, the loan structure continued to optimize, with rapid growth in loans to sectors like technological innovation and inclusive small and micro businesses. Specifically, by the end of December, outstanding loans to the information technology industry, scientific research services, and inclusive small and micro businesses increased by 35.4%, 23.4%, and 14% year-on-year, respectively.
Regarding financing costs, the weighted average interest rate for newly issued corporate loans in the city was 2.64% in December, down 38 basis points from the same period last year, remaining at a historically low level. The weighted average interest rate for small and micro enterprise loans was 2.96%, a decrease of 30 basis points year-on-year.
Various deposits experienced steady growth. Liquidity for household and corporate sectors improved significantly. At the end of December, the outstanding balance of deposits in local and foreign currencies for the entire city stood at 245 trillion yuan, an increase of 11.3% year-on-year, which was 2.3 percentage points higher than the national average. In terms of increment, deposits in local and foreign currencies increased by 2.49 trillion yuan for the full year.
By sector, household deposit balances grew by 9.1% year-on-year. Corporate deposit balances increased by 5.3% year-on-year. Deposits of non-bank financial institutions surged by 30.4% year-on-year. Notably, the growth rate of demand deposits for both households and non-financial enterprises rebounded significantly, rising by 1.3 and 23.1 percentage points respectively from the end of the previous year. Conversely, the growth rates of time deposits and other deposits declined, falling by 1.2 and 7.1 percentage points respectively from the end of the previous year.
In the next stage, following the central bank's unified deployment, we will continue to implement a moderately accommodative monetary policy, carry out a package of fiscal and financial measures to stimulate domestic demand, promote low overall social financing costs, continuously enhance the quality and efficiency of financial services for the real economy, deepen financial reforms and high-level opening up, and provide strong financial support for Shanghai to achieve a good start to the "16th Five-Year Plan" period.
Q&A Session Economic Daily Could you elaborate on the basic situation and characteristics of Shanghai's cross-border receipts and payments over the past year?
Zhong Lei Thank you for your interest in Shanghai's foreign exchange situation. In 2025, Shanghai's external economic activities remained vibrant, with cross-border receipts and payments maintaining a growth trend, characterized by the following:
First, the scale of cross-border receipts and payments and bank foreign exchange settlement and sales reached new highs. In 2025, the total value of cross-border receipts and payments handled by banks on behalf of clients in the Shanghai region reached $5.66 trillion, accounting for over 36% of the national total, a year-on-year increase of 14.3%. The total value of bank foreign exchange settlement and sales exceeded $1.15 trillion, representing over 23% of the national total, a year-on-year increase of 10.7%.
Second, goods trade demonstrated resilience, and the structure of service trade receipts and payments optimized. Facing a complex and changing domestic and international environment in 2025, goods trade in the Shanghai region showed strong resilience and achieved steady growth. The total value of goods trade receipts and payments for the year exceeded $1 trillion, up 7.0% year-on-year, a growth rate 2.6 percentage points higher than the national average. The total value of service trade receipts and payments surpassed $250 billion, increasing by 2.2% year-on-year, firmly ranking first nationally and accounting for nearly 30% of the national share. Notably, emerging producer services trade, which relies on digital technology and knowledge-intensive factors to provide intermediate services for manufacturing and commercial operations, showed positive development, with both the total value and surplus increasing year-on-year.
Third, direct investment remained stable and orderly, while two-way securities investment continued to be active. In 2025, inbound capital for foreign direct investment (FDI) in the Shanghai region recovered quarter by quarter, and outbound direct investment (ODI) maintained growth. The total value of cross-border receipts and payments for direct investment for the year increased by 5.8% year-on-year. With the steady advancement of two-way financial market opening, foreign capital allocation to RMB assets and domestic entities' participation in international financial markets became increasingly active. Related cross-border capital flows were primarily facilitated through Shanghai's international financial center, with the total value of receipts and payments under the securities investment category growing by over 19% year-on-year, accounting for more than 60% of the national total.
Fourth, the foreign exchange market maintained strong resilience, and corporate awareness of exchange rate risk neutrality strengthened. In 2025, the RMB exchange rate remained basically stable at an adaptive and equilibrium level. The foreign exchange market in Shanghai operated smoothly with active trading; the annual scale of bank foreign exchange settlement and sales increased by 21% and 4% year-on-year, respectively. Enterprises showed increased demand for actively identifying and managing exchange rate risks in cross-border trade and investment. The signed volume of RMB foreign exchange derivative transactions handled by banks within the jurisdiction throughout the year increased by 9.6% year-on-year. The foreign exchange hedging ratio approached 38%, about 8 percentage points higher than the national average during the same period, placing Shanghai at a leading level nationally.
International Finance News Director Zhong just outlined last year's cross-border receipts and payments situation in Shanghai. Many are also interested in the status of Shanghai's cross-border RMB business. Could you provide more details?
Shi Jiandong Thank you for the question. In 2025, amidst complex changes in the domestic and international economic environment, the PBOC Shanghai Headquarters resolutely implemented the decisions of the Party Central Committee, the State Council, and the PBOC's requirements. Guided by the principles of serving the real economy and facilitating trade and investment, it continuously expanded the breadth and depth of RMB cross-border use, achieving both quantitative growth and qualitative improvement in Shanghai's cross-border RMB business, characterized by three features: First, the scale of RMB cross-border receipts and payments continued to grow. The value of RMB cross-border receipts and payments in Shanghai reached 324 trillion yuan, a 9% year-on-year increase, accounting for 46% of the national total and maintaining the top position nationally. Within this, RMB cross-border receipts and payments under securities investment amounted to 242 trillion yuan, accounting for over 70% of the total, playing a significant role in enhancing Shanghai's status as a global hub for RMB asset allocation. Second, the capacity of cross-border RMB business to serve the real economy continued to improve. The value of RMB cross-border receipts and payments closely related to the real economy—specifically "current account + direct investment (excluding cash pools)"—totaled 35 trillion yuan, a 14% year-on-year increase, 5 percentage points higher than the overall growth rate. The proportion of RMB cross-border receipts and payments for the current account and goods trade relative to cross-border receipts and payments in local and foreign currencies during the same period increased by 1.9 and 1.0 percentage points, respectively, compared to the previous year, indicating growing willingness among real economy entities to use cross-border RMB settlement. Third, positive progress was made in RMB usage among key enterprises, key sectors, and key regions. The settlement volume of cross-border RMB for shipping companies, new forms of foreign trade, and bulk commodities increased by 48%, 16%, and 2.6% year-on-year, respectively. Cross-border RMB settlement between Shanghai and countries and regions involved in the "Belt and Road" Initiative grew by 4.2% year-on-year.
In 2025, the Shanghai Headquarters undertook extensive work to expand RMB cross-border use. Key measures included: Collaborating with relevant municipal departments and financial institutions to thoroughly implement the "Action Plan for Further Enhancing Cross-Border Financial Service Facilitation in the Shanghai International Financial Center," focusing on promoting RMB usage among key enterprises, in key sectors, and key regions, and advancing pilot initiatives such as the comprehensive reform of offshore trade financial services in the Lingang New Area and the pilot for upgrading the functions of Free Trade Accounts (FTAs). Simultaneously, multiple measures were taken to strengthen the macroprudential management of cross-border capital flows, continuously improve regulatory capabilities and risk prevention levels under open conditions, ensuring the steady advancement of RMB cross-border use while safeguarding security.
Moving forward, the Shanghai Headquarters will closely align with the guidance of the "16th Five-Year Plan," instructing banks to continuously enhance their cross-border financial service capabilities, include more eligible enterprises in the list of high-quality enterprises, optimize business processes, improve the efficiency of RMB fund receipts and payments, and better leverage cross-border RMB business to serve the real economy, fully support stabilizing foreign trade and investment, and accelerate the construction of the Shanghai International Financial Center.
Shanghai Securities News Over the past year, what achievements has the PBOC Shanghai Headquarters made in supporting the construction of the Shanghai International Financial Center? What are the next steps?
Zhou Peng Thank you for your question. In 2025, the PBOC Shanghai Headquarters diligently implemented the decisions of the Party Central Committee and the State Council on accelerating the construction of the Shanghai International Financial Center, fully complied with the relevant requirements of the PBOC, the Shanghai Municipal Party Committee, and the Shanghai Municipal Government, adhered to the principle of seeking progress while maintaining stability and upholding fundamental principles while breaking new ground, and promoted a series of new advancements in the construction of the Shanghai International Financial Center.
First, it vigorously deepened the facilitation of cross-border trade and investment. It promoted the effective implementation of the comprehensive reform pilot for offshore trade financial services in the Lingang New Area, achieving cross-border settlement efficiency benchmarked internationally. The high-level opening pilot for cross-border trade and investment continued to improve in quality and efficiency, and the "green foreign debt" policy pilot also yielded positive results. Meanwhile, it steadily advanced the reform of bank foreign exchange business practices and optimized the management of cross-border capital pool operations for multinational corporations.
Second, it steadily expanded the high-level opening of financial markets. Adhering to international rules, it successfully facilitated the issuance of multiple Shanghai Free Trade Offshore Bonds. It promoted the establishment of a one-stop account opening platform for overseas institutions in the interbank bond market, enhancing convenience for overseas institutions to enter the market. As of the end of December 2025, 1,189 overseas institutions had entered the interbank bond market, holding 3.46 trillion yuan of interbank bonds, accounting for approximately 2.0% of the total custody volume in the interbank bond market.
Third, it continuously expanded the breadth and depth of RMB internationalization. It actively implemented the "Action Plan for Further Enhancing Cross-Border Financial Service Facilitation in the Shanghai International Financial Center." It conducted the pilot for upgrading the functions of Free Trade Accounts (FTAs). In 2025, Shanghai's total cross-border RMB settlement accounted for 46% of the national total.
Fourth, it fully supported the development of the real economy. It led the establishment of a special task force for Shanghai's "Five Major Areas of Finance" to strengthen policy coordination among departments. It accelerated the construction of the Shanghai Sci-Tech Innovation Financial Reform Pilot Zone, innovatively utilized specialized loans and discounts like "Hu Ke Zhuan Dai" and "Hu Ke Zhuan Tie" to precisely support sci-tech innovation enterprises. It guided various entities to issue sci-tech innovation bonds in the interbank market. It orderly promoted the pilot expansion of the supported areas for the carbon emission reduction support tool. It facilitated the landing of the re-financing policy for blockchain letters of credit in shipping and trade. The international operating center for the digital yuan was officially launched in Shanghai, and the pilot for the multi-central bank digital currency bridge (mCBDC Bridge) was also deepening.
Fifth, it continuously optimized the financial development environment. It focused on improving payment convenience, optimized the "tax refund upon purchase" service for overseas visitors, and promoted the full-line implementation of bank card and digital yuan hard wallet swipe-to-pass functionality in the Shanghai rail transit system. It made every effort to ensure the preparation and operation of the International Monetary Fund (IMF) Shanghai Center. In terms of legal safeguards, it promoted the introduction of regulations governing the development of Free Trade Account business and legislation for free trade offshore bonds. Simultaneously, it strengthened the monitoring and analysis of cross-border capital flows, adhering to the bottom line of financial security under open conditions.
In 2026, the PBOC Shanghai Headquarters will base its work on the actual situation, cooperate with the central bank in advancing Shanghai's development of offshore finance, promote the expansion of the comprehensive reform pilot for offshore trade financial services in the Lingang New Area, continue to advance RMB internationalization, actively promote the implementation of pilot policies for foreign exchange management reform, steadily advance institutional opening of financial markets, diligently work on the "Five Major Areas of Finance," continuously optimize the financial business environment, and coordinate efforts to achieve a good start for the construction of the Shanghai International Financial Center during the "16th Five-Year Plan" period.
Liberation Daily At last year's Lujiazui Forum, PBOC Governor Pan Gongsheng announced the optimization and upgrade of Free Trade Account functions. We noted that the pilot for upgrading Free Trade Account functions was officially launched at the end of 2025. Could you provide an update on the progress?
Shi Jiandong Thank you for your question. This functional upgrade pilot represents the most significant reform since the launch of the Free Trade Account in May 2014. It was prepared over a considerable period, receiving strong support and guidance from relevant departments of the central bank, while also fully incorporating opinions and suggestions from municipal departments, financial institutions, and enterprises. The policy design初衷 included: First, to provide stronger and higher-quality financial support for the real economy. The pilot sets a high threshold for participating enterprises, aiming to significantly enhance the liberalization and facilitation of cross-border trade and investment financing under controllable risks, helping large multinational corporations better explore international markets and participate in international competition. Second, it achieved "cross-first-line" liberalization. By tightening "cross-second-line" management, the pilot enables free receipts and payments "cross-first-line." Pilot enterprises using upgraded accounts for capital account transactions other than securities investment are not subject to quota and approval restrictions related to external debt beyond the investment-registered capital difference, full-cross-border financing, and overseas lending, and do not need to undergo pre-registration, filing, or open special accounts with the foreign exchange authorities. Third, it provides a "training ground" for banks to enhance their international operational capabilities. Pilot banks gain practical experience, improve their cross-border financial service capabilities and financial risk prevention levels, and undergo greater stress testing in terms of institutional opening. Fourth, it further expands the use of RMB in cross-border trade and investment. Fund transfers "cross-second-line" by pilot enterprises must be conducted in RMB, which helps increase enterprises' enthusiasm for using RMB cross-border and promotes the inclusion of RMB in the international currency application and management systems of more multinational corporations.
The pilot was officially launched on December 5, 2025. Due to thorough preparation, precise measures, and forceful implementation, it achieved a successful start in the first month, with the initial batch of business successfully executed and receiving positive feedback from all sides. As of now, 11 banks and 29 enterprises have participated in the pilot, with a total cross-border fund receipt and payment scale of nearly 50 billion yuan. Overall, the pilot has achieved significant results, largely meeting the expected goals, and exhibits five characteristics: First, settlement convenience. Adhering to the principle of "first-line liberalization, second-line control," the pilot significantly enhances the liberalization level of cross-border trade and investment, gaining wide recognition from pilot enterprises and being generally regarded as a major step in Shanghai's institutional opening of cross-border finance. Second, smooth operation. Pilot banks, adhering to the philosophy of "developing one mature enterprise at a time," select high-quality enterprises and prudently promote business development, leading to a stabilization of market business differentiation. Third, business diversity. The scope of pilot business continues to expand, covering various cross-border transactions including general trade, processing trade, offshore trade, service trade, cross-border financing, and overseas lending. Fourth, controllable risks. The pilot has well-balanced openness and risk prevention, with the total transaction volume within expectations and overall risks under control. Fifth, RMB predominance. In the business conducted by pilot enterprises through upgraded accounts, the proportion of cross-border RMB reached 97%, aligning with the policy direction of expanding RMB cross-border use.
The Paper Recently, the Shanghai branch of the State Administration of Foreign Exchange (SAFE) released the "Shanghai Pilot Guidelines for Green Foreign Debt Business (Trial)." What is the background for introducing the green foreign debt policy, and what is the current status of the pilot's implementation?
Zhong Lei Thank you for your question. In recent years, China has accelerated the construction of a new development pattern and strived to achieve the "Dual Carbon" goals. Currently, China has built the world's largest green credit market and green bond market. Enterprises have generated substantial funding needs during their green and low-carbon transition, yet a financing gap for corporate green financing persists. Against this backdrop, in late November 2025, following the work deployment of the State Administration of Foreign Exchange, the SAFE Shanghai Branch issued the "Shanghai Pilot Guidelines for Green Foreign Debt Business (Trial)," initiating a pilot for green foreign debt business in Shanghai.
The pilot policy optimizes the macroprudential management of cross-border financing for eligible non-financial enterprises. It allows foreign debt funds specifically earmarked for green or low-carbon transition projects to occupy less of the enterprise's full-cross-border financing risk-weighted balance, thereby expanding the cross-border financing scale for enterprises investing in such projects. This enhances the efficiency of absorbing and allocating global resource elements in the green and low-carbon development field and helps build a diversified green financing system, improving a multi-level and wide-coverage green financial service system. Currently, the "green foreign debt" policy pilot in Shanghai has achieved a positive first-mover demonstration effect. In the over one month since the pilot's launch, under the guidance of the SAFE Shanghai Branch, banks within the jurisdiction have actively promoted the policy, efficiently handling green foreign debt registration for 6 enterprises, with a total financing amount exceeding $64 million (approximately 450 million yuan).
In the next step, the SAFE Shanghai Branch will continue to improve the long-term mechanism for the green foreign debt pilot, strive to enhance the quality and efficiency of green financial services in the foreign exchange sector, diligently compose the "major article" of green finance, and effectively promote the implementation and refinement of innovative foreign exchange management policies for cross-border investment and financing within its jurisdiction.