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Shanghai Free-trade Zone

Shanghai Free-trade Zone is the first Hong Kong-like free trade area in mainland China. The plan was first announced by the government in July and it was personally endorsed by Premier Li Keqiang who said he wanted to make the zone a snapshot of how China can upgrade its economic structure. Other mainland cities and provinces including Tianjin and Guangdong have also lobbied Beijing for such approvals. The Shanghai FTZ will first span 28.78 square kilometres in the city's Pudong New Area, including the Waigaoqiao duty-free zone and Yangshan port and it is believed it may eventually expand to cover the entire Pudong district which covers 1,210.4 sq km of land.

CommentInsight & Opinion
LEADER

Shanghai Free-Trade Zone is wake-up call for Hong Kong

PUBLISHED : Friday, 04 October, 2013, 12:00am
UPDATED : Friday, 04 October, 2013, 11:37am

The Shanghai Free Trade Zone may not yet be comparable with a free port, and many top leaders were absent at its launch, including its foremost advocate, Premier Li Keqiang , but the leadership's intent to prepare the ground for nationwide reforms that would impact on Hong Kong should not be underestimated.

The launch came not long before the third plenum next month of the Central Committee elected at the Communist Party's 18th congress, which is supposed to set guidelines for the economy over the next decade. Although state media did not directly link the two events, the zone's establishment is significant. Officials have foreshadowed wide-ranging reforms there covering government approvals, trade and finance, and indicated that if they succeed, they will be rolled out nationally over the next two or three years. Taken at face value, this means that if currency experimentation works, the yuan could become convertible sooner than many analysts expect.

Some Chinese media have compared the free trade zone with China's first special economic zone in Shenzhen. That raises questions about how free it really is. Pilot initiatives are still being rolled out. But at this stage the list of things not allowed seems as long as for those that will be permitted. This isn't a free port like Hong Kong and, therefore, potentially less of a challenge. Bolder experiments in financial and non-financial services apply only to activities confined within the small zone. At the same time, such an experiment is consistent with Beijing's approach. In the past it has designated various cities as front runners in particular industries or as social experiments. This can pose a challenge to central control. The virtue of running this exercise in a tightly sealed zone is that any benefit comes with control. The ultimate effect could be to help speed up economic reform nationwide. And that might be the bigger threat to Hong Kong.

Asia's richest man, Li Ka-shing, has warned that the free trade zone will impact Hong Kong more heavily and sooner than people expect. This is a reminder that while there may be no need to worry at this stage about the city's status as Asia's financial centre, we should not be complacent. Beijing appears to be positioning itself to adopt reforms necessary to undertake economic restructuring and put the economy on a more sustainable track. Hong Kong should be ready to seize opportunities this will create to consolidate its position.

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hard times !
Though even our richest guy in town,tycoon Li Ka-sing has warned Hongkongers to be cautious upon the setting up of the so-called Free Trade Zone in Pudong,Shanghai---a brainchild of premier Li Ha-keung as it might become another financial centre of China to threaten our present status.Yet this Old Hong Kong think that (and firmly believe) that as long as China remains a one-party-ruled state and practises autocratic governance,we Hongkongers need not to fear that our status in finance or being an international city will one day be replaced by either this FTZ in Shanghai or Jin Hoi in Shenzhen since there are no freedoms of communication,speech,expression or 'rule of law' plus respect towards human rights or private properties,not to say a democratic political system on Mainland as we are enjoying now here in Hong Kong.Safeguard our incumbent excellent systems and strive for universal suffrage are what we should treasure and do now.Don't worry about that Free Trade Zone in Shanghai !
richardg23
What tosh. Its a tiny, irrelevant, and pathetic little piece of PR that is as threatening to HK as a FTZ in Costa Rica, for all the reasons set out in the comment below, and more. That Beijing had to enlist KS to play up the threat shows how toothless it is. Shame on SCMP for endorsing the same idiotic view
blue
These columns are so inane and lack insight! Please stop! It's really killing me.

Both comments below me are 100% correct! SHUT UP ABOUT THIS DEAD IN THE WATER FTZ! Nobody in HK takes it seriously!

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