The mainland's decision to create 12 free-trade zones, in addition to Shanghai, begs the question whether they could all be viable. Xinhua reported on Wednesday the central government had agreed in principle to approve 12 free-trade zones, more than three months after the Shanghai zone was created in September. Guangdong and Tianjin were expected to launch in a year. The report did not name the other locations. Analysts said more free-trade zones would increase competition for talent and capital and result in an infrastructure building spree in the near term. In the longer term, they said that punishing competition and economic development might ultimately result in three prominent zones - one each in eastern, southern and northern China. Hong Kong, with its strength in financial services, logistics and the free flow of information, should pursue greater integration with Guangdong, which stood to be a leader among the zones, they said. It is a challenge to have all the free-trade zones succeed CAESAR WONG, DELOITTE "Guangdong is likely to be the prominent player in southern China, and Shanghai in the eastern coastal region," said Caesar Wong, a China tax and business advisory partner at Deloitte. "I haven't seen any front runner in the northern region." A mainland government source told the South China Morning Post the other cities approved for free-trade zones included Zhoushan and Hangzhou in Zhejiang province, Qingdao in Shandong, Chengdu in Sichuan and Wuhan in Hubei. Free-trade zones, like the one in Shanghai, are being touted as testing grounds for increased access to foreign investment as the mainland strives for stable, long-term growth. "It is a challenge to have all the free-trade zones succeed," Wong said. A case in point was the development of five special economic zones over the past 34 years as pilot zones for the mainland's reform and opening up, with the programme pioneered by Shenzhen in 1980 and followed by Xiamen in Fujian province, Shantou and Zhuhai in Guangdong, and Hainan Island. "Today, other than Shenzhen, who can name other prominent examples of special economic zones?" Wong asked. He said Guangdong's free-trade zone was likely to align five core regions - Hong Kong, Macau, Qianhai, Hengqin and Nansha - a so-called golden pentagon. Peter Lee, the head of asset management firm Veco Invest (Asia), said the devil would be in the detail. Lee, a regular visitor to Qianhai and Shanghai, said after meetings with officials that he saw a new willingness to open up sections of the economy and relax regulations that had previously added red tape to running a business. "It is unprecedented that the mainland should launch so many pilot schemes in this way," he said. "In the past, the approach had been very cautious, one by one." With such a large number of cities being given their own zone, Lee said he expected to see a variety of pilot schemes being tested across the country. Analysts said yuan internationalisation and financial services would be key elements in all zones. He Xiaojun, a deputy chief at the China Banking Regulatory Commission's Guangdong office, said on Wednesday the provincial government was planning incentives to attract more Hong Kong banks to move into the province's zone. He said the zone was a "strategically important opportunity" for Hong Kong banks to penetrate further into Guangdong, and that the regulator was seeking to optimise the locations of foreign banks in the province. As of the end of 2012, there were 61 Hong Kong bank outlets in the province, of which 40 were in the industrialised Pearl River Delta.