The Shanghai pilot free trade zone (FTZ) started operation on Sunday in China’s largest economic and financial hub Shanghai.
The zone will give Chinese policy makers the opportunity to experiment with corporate deregulation and liberalization of services in one of the country’s most important economic regions.
The 29 square kilometer zone along Shanghai's coastline includes the existing free trade port areas and the Pudong airport and will combine the free movement of goods associated with a FTZ with the policy-driven initiatives of a free trade area.
China aims to lift the zone up to international standards featuring convenient investment and trade, free exchange of currencies, efficient supervision and a sound legal environment in two to three years, according to a detailed plan published on the government's website Friday.
Wang Xinkui, director of Shanghai municipal government's Counselor office, said China's megacities lag behind in their capacity to add value when compared to cities like Singapore and Tokyo.
"With the establishment of the pilot FTZ, Shanghai will be an even more powerful magnet for multinational corporations to set up offices, and that will boost China's competitiveness in global industry chains," said Wang, who helped draw up the draft plan for the FTZ.
Wang also said the FTZ is another stage in the national strategy of reform and opening-up, which started more than three decades ago.
The FTZ is important for China to cope with the new trends in globalization. "The goal of the pilot scheme is to create a replicable and flexible area instead of a traditional zone only with special policies specific to it," Wang said.
With "Chinese characteristics," the pilot zone is expected to become a milestone in China's economic growth and a touchstone of its future reform.
The government and the public are to view the FTZ zone as a new type of special economic zone and will work to facilitate its development by fostering an accommodating environment in various ways.