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  • Aug 31, 2014
  • Updated: 5:27am

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.

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FINANCE

Beijing reassures Hong Kong on Shanghai free-trade zone

PUBLISHED : Monday, 30 September, 2013, 12:00am
UPDATED : Monday, 30 September, 2013, 8:25am
 

Poll

  • Yes: 70%
  • No: 30%
30 Sep 2013
  • Yes
  • No
Total number of votes recorded: 318

Beijing was quick to soothe concerns in Hong Kong about its rivalry with Shanghai after the mainland's commercial capital officially launched its free-trade zone yesterday.

Yin Zonghua, director of the international trade department of the Ministry of Commerce, told reporters the pilot run of the zone would have no negative impact on Hong Kong's future. He said the leadership would make further arrangements to deepen the economic relationship between the mainland and Hong Kong.

"Hong Kong has its own advantages that can help it play a big role in the Shanghai free-trade zone," Yin said. "The upcoming arrangements to consolidate the economic partnership will be of benefit to Hong Kong's long-term prosperity and stability."

The free-trade zone, modelled on Hong Kong, is a test bed for regulatory and financial liberalisation on the mainland.

However, the absence of top leaders at yesterday's opening, such as Premier Li Keqiang , a strong advocate of the zone, raised some eyebrows. Vice-Premier Wang Yang had been expected to officiate but he was also absent.

A no-show by top officials at the launch of the zone could be a sign of ambivalent support for the planned reforms from senior bureaucrats. Li had fought opposition to the zone from ministries and regulators overseeing trade and financial markets.

Also surprising by its absence was a widely expected reduction of corporate income tax for firms in the zone, which the national taxation authorities said yesterday would not be forthcoming.

A first batch of 36 firms, including Citibank and DBS, have received approval to set up business inside the zone.

The People's Bank of China said it would publish a detailed operating guide on major financial liberalisation in the zone, including full convertibility of the yuan and a market-based interest rate mechanism.

Among details released yesterday, Liao Min, head of the China Banking Regulatory Commission's Shanghai branch, said loan-to-deposit ratios and other regulatory requirements would be adjusted, and banks in the zone could receive deposits from abroad.

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This article is now closed to comments

XYZ
It is a non-event as far as Hong Kong is concerned. Good luck to them.
swami.vas
The opening of the Shanghai Free Trade Zone (SFTZ) is in the right direction and should eventually be a blessing to the economy of the entire region! There ought to be opportunities for entrepreneurs from other places especially from Hong Kong and they should grab them and set up shops there for producing products of high quality for export market. Such a move should meet with the ready approval of the authorities in charge of SFTZ. Indirectly, the zone will also give a boost to Hong Kong stock market as people working and living in there are likely to be free to invest in stocks traded in HK exchange. Of course, there are still some apparent teething problems and hopefully the SFTZ authorities will sort them out without delay and remove all hurdles for smooth operation of the zone. By the way, one should not read too much into absence of some top Chinese political dignitaries at the inauguration ceremony of the zone. With the SFTZ beginning operation, the current economic co-operation between Hong Kong and the Mainland should only get further beefed up to the benefit of all!
blue
This Shanghai free trade zone is a joke and will never compare to HK

If they were really serious about this free trade zone, they would have made it an SAR with its own legal system and currency. But that would be politically incorrect!
 
 
 
 
 

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