Two-way trade settlement services started on Tuesday in Hainan following the launch of a free trade (FT) account in the China (Hainan) Pilot Free Trade Zone in southern China's Hainan province.

"The first fund transfer settlement was made for the import of 300 metric tons of fluff pulp from International Paper and for the export of a batch of clothing materials under the free trade account on Tuesday. The new system was very fast and convenient," said Zheng Xiaobo, general manager of Hainan ITG Co Ltd, a joint venture between Hainan Provincial Development Holdings Corp Ltd and Xiamen ITG Group Corp Ltd.

The move is part of the efforts to help develop a sound business environment in the country's largest free trade zone established in April 2018. The Hainan Free Trade Account is a convertible accounting system with renminbi as its base currency, using unified accounting rules and taking into account various types of risk management between the renminbi and foreign currencies, according to the Haikou branch of the People's Bank of China, the nation's central bank.

Market entities can conduct investment, financing, exchange and other cross-border transactions applicable to the Hainan Pilot Free Trade Zone, which is the country's 12th FTZ.

The first group of commercial banks to launch the FT accounts are the Hainan Branch of Bank of China and the Haikou Branch of Pudong Development Bank. Other commercial banks are preparing for personnel training, system testing and system construction. They will launch FT accounts in the first half of this year, according to the provincial authorities.

Under the new system, the Bank of China Hainan branch has launched a number of services such as the first import payment, the first export collection, the first forward settlement and the first international letter of credit since trial operation of the FT account service started on Dec 28, 2018.

The development of the Hainan's free trade account system is one of the 12 leading projects designed for the Hainan free trade zone. Local authorities said financial institutions in Hainan will focus on the central authorities' strategic positioning for Hainan FTZ, intensify financial innovation, upgrade infrastructure, promote trade investment and facilitate financing, prevent and resolve financial risks and help develop a new pattern for Hainan's comprehensive opening-up.

The central authorities announced in April plans to transform the entire island of Hainan into the country's 12th FTZ, covering 35,400 square kilometers, an area 32 times the size of Hong Kong.