China opens new trade zone in Shanghai, reform plans unveiled

Sun Sep 29, 2013 7:16pm EDT
 
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By Gabriel Wildau and Pete Sweeney

SHANGHAI (Reuters) - China opened a new free trade zone in Shanghai on Sunday in what has been hailed as potentially the boldest reform in decades, and gave fresh details on plans to liberalize regulations governing finance, investment and trade in the area.

Officials gave no details on when specific initiatives will be implemented but the government has said most will be introduced in the next three years.

The Shanghai FTZ, which covers an area of nearly 29 sq km on the eastern outskirts of the commercial hub, was approved by China's State Council, or cabinet, in July.

State-run Xinhua news agency quoted Commerce Minister Gao Hucheng as saying that the creation of the FTZ was a crucial decision for China's next wave of reform and opening-up.

"It follows the trend of global economic developments and reflects a more active strategy of opening-up," Gao said at the launch ceremony.

The State Council said on Friday it would open up its largely sheltered services sector to foreign competition in the zone and use it as a test bed for bold financial reforms, including a convertible yuan and liberalized interest rates.

Economists consider both areas key levers for restructuring the world's second-largest economy and putting it on a more sustainable growth path.

Some Chinese and foreign firms are already setting up subsidiaries in the zone.   Continued...

 
Container trucks drive past the container area at the Yangshan Deep Water Port, part of the newly announced Shanghai Free Trade Zone, south of Shanghai September 26, 2013. REUTERS/Carlos Barria