Deutsche Bank has been given the green light by Chinese regulators to set up a sub-branch in the freshly minted Shanghai free-trade zone, joining Citibank, DBS , Hang Seng Bank, HSBC and Bank of East Asia in receiving approvals to start operations in the pilot free trade zone.

The Shanghai zone covers an area of almost 29sq km on the eastern outskirts of the commercial hub and was officially launched in late September.

It will act as a poster child for the economic reforms in the Third Plenum of the Communist Party.

China’s cabinet, the State Council, said the zone would open up to foreign investment and act as a testing site for financial reforms, including a convertible yuan and liberalised interest rates.

Deutsche said the sub-branch in the Shanghai free trade zone would serve corporate and financial institution clients in the area and offer a wide range of corporate banking services with a focus on cross-border transactions.

"The Shanghai Free Trade Zone is expected to bring about new opportunities for banks that are well-positioned to serve clients' needs in a global context," Feng Gao, president of Deutsche Bank China said in a statement. It did not specify when the sub-branch would open.

Powerful impact
Meanwhile, property firm CBRE said it believed the Waigaoqiao FTZ will have a powerful and long-lasting impact on the property market. "Our research shows this is already visible both within and around the zone, with the strongest influence being in the office market, where a surge in demand has led to a spike in both rental and capital values," it said. The opening-up of service industries in the Shanghai FTZ is likely to result in a large group of professionals moving to work and live in the area.