Cautious start for Shanghai's free trade zone

After the big-bang unwrapping, the uncertainty: how free is the Shanghai Free Trade Zone (FTZ)?

As the central government's propaganda machine churned out news of the inauguration on Sunday, which star supporter Premier Li Keqiang and other state leaders decided to give a miss, some analysts have started asking exactly how different will the 29 square kilometre slice of trade haven in coastal Pudong New Area be.

Clues to concessions on corporate income tax have been elusive while very little has been said on capital account and interest rate liberalisation.

While dos are scarce, there is a long list of don'ts in the form of a "negative list" for foreign investors. Moreover, private companies are required to make public their annual profit and loss account, which some say would make foreign companies "uncomfortable".

In Hong Kong, private companies are required to submit their accounts to the inland revenue department, but they are under no obligation to make them public.

"It suggests to us a cautious start and the gradual approach that officials want to take in this experiment," said Nomura chief economist Zhang Zhiwei, referring to the "negative list".