Shanghai plan to lure foreign investors to free-trade zone

The central government will unveil as early as this week a major package of new policies, covering industries from financial services to shipping and transport, as part of its plan to create a Hong Kong-like free-trade zone in Shanghai.

The plan, which could contain as many as 21 separate initiatives, will be a template for the potential nationwide roll-out of structural economic reform and liberalisation, two sources with first-hand knowledge of its contents told the South China Morning Post.

"If these things can work well in Shanghai, they can be copied around the country. The plan is for Shanghai now, but it will also eventually have a major impact on the business environment for foreign investors in the entire country," one source said. The source declined to be identified because of the sensitivity of the information being disclosed.

The sources told the Post that Premier Li Keqiang had taken personal responsibility for approving, in principle, the policy package to support the building up of the new Shanghai free-trade zone in the city's Pudong New Area, but that the mainland leadership was still finalising the exact details.

On July 3, the State Council issued a statement after a meeting chaired by Li saying the free-trade zone in Shanghai would be a snapshot of an "upgraded Chinese economy". Details and rules for how the central government plans to support the project have yet to be officially released.

Shanghai already has three bonded trade or port zones, according to the Pudong government's website. It says the new pilot zone will include all three - at the Waigaoqiao port, the Yangshan deepwater port and Pudong International Airport - within its 28 square kilometres.