Shanghai mayor vows progress on free-trade zone this year
Shanghai's mayor promised substantial progress on the city's free-trade zone this year, saying it was the city's No 1 task and a national strategy that must be given priority.
At the annual meeting of the city's legislature, which opened yesterday, Yang Xiong underscored the significance of making the yuan fully convertible inside the 28.8-square-kilometre testing ground for economic reforms in the country.
"All the city's strength and resources must be fully utilised to ensure the successful running of the zone, because it is an important national strategy," Yang said. "We will seek substantial progress with pilot reforms."
The mainland's first free-trade zone was launched in late September with the aim of allowing the yuan to be convertible on the capital account, meaning for investment and financial transactions. The details of the zone have yet to be announced.
Non-convertibility of the yuan is the main obstacle preventing Shanghai from competing with global financial centres like Hong Kong and New York.
The Shanghai experiment is crucial as the mainland strives to shift its focus from manufacturing to the service sectors, including finance and commerce.
In 2009, the State Council, China's cabinet, endorsed Shanghai's blueprint to transform itself into a global financial centre, posing a threat to Hong Kong as the established regional magnet for international capital.
But Shanghai's attempts to attract foreign businesses and investors have received the cold shoulder because of the numerous regulatory hurdles to setting up in the city. The city's growth has slowed in recent years.
In his report, Yang forecast growth in Shanghai's gross domestic product would fall to 7.5 per cent this year from 7.7 per cent last year. He told the lawmakers the local government would "make an all-out effort" to implement all the approved planning liberalisations inside the free-trade zone.