Government sources familiar with the plan told the that the government initially considered declaring that the new free-trade zone would take in all of Pudong.

"Officials and scholars discussed the possibility of making the entire Pudong New Area a new free-trade zone," said one of the sources, referring to the official name of the district.

They later agreed to focus on smaller areas within the district as they wanted to make sure that the launch would be smooth and successful, said the source, who declined to be named because of political sensitivities.

"The reason why the top leaders agreed to launch the free-trade zone first in specific parts of Pudong was mainly because of financial industry risks related to offshore banking and concerns about hot money inflows," a government source said.

"You need to make sure if those risks happen, you can get them under control. From that perspective, Pudong is way too big and it would be far more difficult to control such potential risks than to deal with just several specific parts of Pudong district," the source said. "But it's always a good option to expand further to cover all of Pudong if the free-trade zone can be worked smoothly in its early stages."

In early 1990, the central government announced the Pudong New Area - covering the eastern side of Shanghai's main Huangpu River - as its newest special economic zone following the success of the Shenzhen zone. The decision to launch Pudong New Area was partly motivated by Beijing's need to overcome difficulties in attracting foreign investment after the Tiananmen incident in 1989.

The Pudong New Area won direct support from Deng Xiaoping, then the top leader on the mainland, who later said he should have launched economic reforms in Shanghai even earlier.

Nowadays, Pudong is regarded as China's Wall Street, where many Fortune 500 companies and international banks have their regional headquarters.