China Opens Shanghai Free-trade Zone. A free-trade zone in Shanghai that China`s government has billed as a major step for financial reforms and economic experimentation has formally started. State media reported that a first batch of 25 Chinese and foreign companies were granted licences to register in the zone. The China (Shanghai) pilot free-trade zone is a nearly 11-sq mile district that covers four existing special trade zones in Pudong district, including one at the airport. China`s state council formally announced rules for the zone on Friday. They outline goals to upgrade financial services, promote trade and improve governance as well as measures to encourage foreign investment in 18 sectors in the country`s tightly regulated service industry. The zone is expected to serve as a testing ground for such financial experiments before they are rolled out elsewhere in China. No timeline was given for any changes, but rules in the zone will be introduced over a three-year period. At a ceremony marking its opening on Sunday, Gao Hucheng, the commerce minister, said the government hoped it would act as "an experimental field to conduct economic reform" and promote economic development nationwide. The government has pledged to open up 18 service industry sectors to foreign investment, including shipping, law and engineering. Foreign-owned performing arts agencies and medical institutions will be allowed. The sale of video game consoles, which is banned in China, will also be allowed, pending approval from authorities of individual games and systems. Another initiative will permit foreigners to set up joint-venture talent management agencies with local partners. Foreign companies will also be allowed to provide some internet services. Dai Haibo, deputy secretary general of Shanghai`s government and vice-director of the zone`s management committee, said it would take three years to determine whether the zone`s rules and system were effective. Wei Yao, a China economist at Société Générale, said in a research note that setting up the zone in Shanghai, a city of "great strategic importance", was a clear sign that policymakers wanted to push for fast economic liberalisation
Posted on: Mon, 30 Sep 2013 07:07:45 +0000
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