Go with the flow – China to develop Shanghai’s free-trade zone and port at ‘orderly pace’
Official says detailed plans to develop free-trade port to be unveiled very soon
Enthusiasm is creeping ahead of reality as Shanghai makes plans to further develop its free-trade zone into a Hong Kong-style free marketplace.
And while there is no concrete operating guide to work from, officials, researchers and company executives are in consensus that the city will need to expand the size of the free-trade zone, liberalise yuan capital accounts, loosen customs requirements and grant free visas to business travellers as it edges closer to becoming a global financial and shipping hub.
“A free-trade port can’t be built overnight,” said Chen Bo, a professor at the Huazhong University of Science and Technology. “The geographic size doesn’t appear to be a main concern since the central government will allow the free-trade zone to expand once the top officials are convinced of the merits of the policies.”
Chen, also an adviser to the local government on policymaking, said visa rules would also be eased to attract more businesspeople to the free-trade port, an upgraded version of the existing zone.
The free-trade zone presently covers a total area of more than 120 square kilometres, more than fourfold its initial size of 28.78 square kilometres when it was established in 2013.
But this still does not amount to a thriving free market on par with international cities such as Hong Kong and Singapore. And the national financial authorities have yet to make the yuan fully convertible under the capital account, a stumbling block to the freer cross-border flow of capital.