Shang­hai FTZ heft quadru­ples

China Daily (Canada) - - FRONT PAGE - By LI YANG in Shang­hai liyang@chi­nadaily.com.cn

China’s State Coun­cil has de­cided to ex­pand the area of the Shang­hai Free Trade Zone (FTZ) four­fold.

It is China’s lat­est move in its FTZ strate­gies, which are geared at pro­mot­ing re­forms in trade, fi­nance and gov­er­nance. Guang­dong, Fu­jian and Tian­jin also were se­lected as new FTZs late last month.

Shang­hai FTZ, which was cre­ated one year ago to ex­plore re­forms that can be repli­cated na­tion­wide, will in­clude three new ar­eas: the Lu­ji­azui fi­nan­cial zone (34.26 sq km), Jin­qiao de­vel­op­ment zone (20.48 sq km) and Zhangjiang hightech zone (37.2 sq km).

The FTZ’s over­all area will in­crease from the cur­rent 28.78 sq km to 120.72 sq km.

“The pres­sure test of new poli­cies and prac­tices ex­plored by Shang­hai FTZ will be more ac­cu­rate in a larger area,” said Chen Yin, vice-di­rec­tor of the Shang­hai FTZ ad­min­is­tra­tion com­mis­sion and vice-sec­re­tary gen­eral of the Shang­hai mu­nic­i­pal gov­ern­ment. “Be­fore the ex­pan­sion, the FTZ’s func­tion was com­par­a­tively limited. The three new ar­eas will let the FTZ have a com­plete gov­ern­ment frame­work and ad­min­is­tra­tive sys­tem, mak­ing its pi­lot re­form have more prac­ti­cal val­ues in the later im­ple­men­ta­tion na­tion­wide.”

“As the area with the dens­est fi­nan­cial fac­tors, Lu­ji­azui can help FTZ bet­ter-test re­forms in open­ing up its ser­vice sec­tors and at­tract­ing higher-end ser­vice in­dus­tries,” said Jian Da­nian, di­rec­tor of the Lu­ji­azui fi­nan­cial area ad­min­is­tra­tion com­mis­sion.

The main ser­vice in­dus­tries in Shang­hai FTZ are trade and lo­gis­tics. Although the FTZ at­tracts some fi­nan­cial agen­cies, many of them are regis­tered only in the FTZ and set up their of­fices in Lu­ji­azui, be­cause of limited space in the FTZ.

“In­clud­ing Lu­ji­azui into FTZ can greatly im­prove the in­flu­ence and pen­e­tra­tion of FTZ’s fi­nan­cial re­form, which should not be done in ‘ware­houses’,” said Zhou Qiren, pro­fes­sor of eco­nomics at Pek­ing Univer­sity.

Jin­qiao and Zhangjia are na­tional mod­els for ad­vanced man­u­fac­tur­ing in­dus­tries and in­no­va­tions, re­spec­tively. As the Shang­hai gov­ern­ment is ac­tively build­ing the city into a global in­no­va­tion cen­ter, the gov­ern­ment hopes the in­volve­ment of Jin­qiao and Zhangjiang in the FTZ can help com­bine its two mis­sions to­gether, pro­mot­ing in­no­va­tion and build­ing up the FTZ.

“As part of FTZ, Zhangjiang will ini­ti­ate more fi­nan­cial in­no­va­tions, sup­port­ing its high-tech in­no­va­tion,” said Chen Gan­jin, gen­eral man­ager of Zhangjiang Group, a Sta­te­owned en­ter­prise in charge of de­vel­op­ing and op­er­at­ing the Zhangjiang high-tech zone. “The con­ve­nient trade in FTZ will fa­cil­i­tate the ex­changes of in­no­va­tive fac­tors.”

There are also chal­lenges with the ex­pan­sion.

“With a larger area and more func­tions, the pres­sure test of Shang­hai FTZ will be up­graded, pos­ing higher re­quire­ments for the gov­ern­ment’s su­per­vi­sion in the gov­ern­ment’s trans­for­ma­tion from a prior ap­proval au­thor­ity to a main­tainer of mar­ket or­der and de­fender for fair com­pe­ti­tion,” said Gu Honghui, deputy di­rec­tor of the Shang­hai de­vel­op­ment and re­form com­mis­sion, the main eco­nomic pol­i­cy­maker of the city.

Ac­cord­ing to Chen Yin, the FTZ ad­min­is­tra­tion com­mis­sion will con­struct a big-databased, su­per­vi­sory in­for­ma­tion-shar­ing plat­form to make com­pre­hen­sive use of in­for­ma­tion scat­tered in dif­fer­ent de­part­ments pre­vi­ously.

“The plat­form has al­ready col­lected more than 7 mil­lion pieces of in­for­ma­tion from 34 gov­ern­ment de­part­ments,” said Chen. “The in­for­ma­tion-shar­ing is the foun­da­tion for co­or­di­nated ac­tions of the whole gov­ern­ment sys­tem.”

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