Shanghai's mayor says there's room for all free-trade zones to prosper
Shanghai mayor Yang Xiong says he is unfazed by free-trade zone (FTZ) competitors, interpreting the enthusiasm for developing Hong Kong-style free ports around the nation as a positive effort to deepen the mainland's economic reform.
However, he indicated that the Shanghai FTZ development would be distinct from other regions.
"We welcome all of the other counterparts to participate in the FTZ development and it will be a combined effort to push reforms," Yang said yesterday. "For Shanghai, the FTZ development is related to the establishment of four centres," he added, referring to the city's "four-centre" ambition to turn itself into a global financial, shipping, trading and economic hub, banking on the mainland's rapid growth.
It officially launched a pilot FTZ in late September which covers an area of 28.78 square kilometres.
His remarks followed a report by Xinhua on Wednesday that said Beijing had granted approval in principle to 12 new FTZs around the country, including ones in Guangdong and Tianjin.
The State Council said the development of the Shanghai FTZ, a testing ground for reforms, would be expanded to other parts of the country.
Despite its stated aim of facilitating cross-border cargo and capital flows, the Shanghai zone has received the cold shoulder from foreign investors who have been disappointed at the extent of liberalisation offered.
Beijing has pledged to allow convertibility of the yuan under the capital account inside the FTZ, a move to boost finance and investments, but has yet to publish detailed guidelines on that liberalisation.
As of late November, only 3 per cent of newly registered businesses inside the Shanghai FTZ were foreign-funded companies.
Shanghai researchers said the national competitors could help reinforce the city's lobbying efforts to fast-track drastic deregulation.
"To copy and expand the FTZ policies, Shanghai can't do it alone," Yang said. "We do need to discuss it with all relevant authorities to do so."
He denied there had been a tug-of-war between the municipality and other ministry-level financial regulators in Beijing over FTZ related policymaking.
Shanghai has been striving to liberalise the finance sector in order to attract foreign capital and become a global financial centre. But financial regulators, including the central bank, have been reluctant to take bold steps.