Shang­hai FTZ still a hot­bed for in­no­va­tion

China Daily (Canada) - - FRONT PAGE - By WU YIYAO in Shang­hai wuyiyao@chi­

China will take some of the lessons learned from the 18-month-old China (Shang­hai) Pi­lot Free Trade Zone, such as sim­pli­fied cus­toms pro­ce­dures, and ap­ply them to three new pi­lot FTZs in Guang­dong, Tian­jin and Fu­jian.

“The Shang­hai FTZ will serve more like a brain as its tests out var­i­ous ideas and plays the role of an in­no­va­tion in­cu­ba­tor, whereas the other three will be like ac­cel­er­a­tors,” Tony Su, a direc­tor at real-es­tate ser­vices provider DTZ China, said this month.

The cen­tral gov­ern­ment an­nounced a de­tailed “neg­a­tive list” on its web­site Mon­day of ar­eas in which in­vest­ment will be curbed at all four zones. The list in­cludes 122 pro­tected sec­tors, down from the 139 that were first ap­plied when the Shang­hai FTZ was set up in Septem­ber 2013.

The Shang­hai FTZ was of­fi­cially ex­panded on Mon­day to cover 120.72 sq km in­clud­ing the dis­trict of Lu­ji­azui. It is now al­most four times as big as when it was orig­i­nally con­ceived, with more re­forms en­acted.

The State Coun­cil has de­fined China’s com­mer­cial hub as a “fore­run­ner of in­no­va­tion” and tasked it with cre­at­ing a more fa­vor­able en­vi­ron­ment for trade and in­vest­ment, in­clud­ing chas­ing free con­vert­ibil­ity of the Chi­nese yuan and more ef­fi­cient bu­reau­cracy, ac­cord­ing to the press con­fer­ence that fol­lowed an­nounce­ment.

Au­thor­i­ties in Shang­hai have been re­search­ing ways in which their free trade zone can in­ter­act with the other three so that its in­no­va­tions can be eas­ily passed along, said Jian Da­nian, deputy dis­trict direc­tor of Pudong.

“Shang­hai’s free trade zone will strive to be­come a hot­bed for tech­no­log­i­cal in­no­va­tion,” Jian said ear­lier this month at a fo­rum on devel­op­ment and gov­er­nance co-hosted by Shang­hai’s Fu­dan Uni­ver­sity and Sin­ga­pore Man­age­ment Uni­ver­sity.

“Its re­forms must move in step with those of the mu­nic­i­pal gov­ern­ment and the devel­op­ment of the dis­trict and the Yangtze River eco­nomic zone.”

Jian said that the launch of more free trade zones will heap pres­sure on Shang­hai to stay on the cut­ting-edge of re­form.

A top pri­or­ity for the city in the fu­ture will be im­prov­ing the func­tion of off­shore busi­nesses.

The FTZ is be­com­ing in­creas­ingly im­por­tant for multi­na­tion­als to in­te­grate their on­shore and off­shore re­sources, as well as for lo­cal en­ter­prises that are ea­ger to raise funds in over­seas mar­kets.

Jian said the reg­u­la­tor will al­low qual­i­fied fi­nan­cial in­sti­tu­tions to carry out off­shore fi­nanc­ing and in­sur­ance busi­nesses there.

The city can re­tain its unique sta­tus amid the flow­er­ing of sim­i­lar zones around the coun­try due to its role as an

Mon­day’s in­ter­na­tional fi­nan­cial cen­ter, said Li Shan­min, direc­tor of the Sun Yat-sen Uni­ver­sity In­sti­tute for Free Trade Zone Re­search.

“While the Guang­dong FTZ may serve as a re­gional fi­nan­cial cen­ter, Shang­hai is an in­ter­na­tional fi­nan­cial cen­ter as it has ex­pe­ri­ence in this field,” Li said.

Since its launch, a se­ries of poli­cies sup­port­ing for­eign trade and fi­nan­cial re­forms have been in­tro­duced. Th­ese in­clude lib­er­al­iz­ing in­ter­est rates for for­eign cur­rency ac­counts of less than $3 mil­lion. Com­pa­nies in the trade zone can also bor­row money over­seas un­der a sim­pler reg­u­la­tory regime.

Fi­nan­cial re­forms in­clude push­ing for­ward cross-bor­der use of the Chi­nese cur­rency, lib­er­al­iz­ing for­eign-ex­change in­ter­est rates, es­tab­lish­ing a for­eign-cur­rency fund­ing pool, and open­ing up free­trade ac­counts.

Shang­hai benefits from its long his­tory of open­ing-up as well as its es­tab­lished po­si­tion as China’s fi­nan­cial cen­ter, said Su.

The fi­nan­cial re­forms in­tro­duced since its launch have helped to lib­er­al­ize cap­i­tal flows and the over­all money mar­ket, which has boosted cross-bor­der e-com­merce and sup­ply- chain fi­nanc­ing, Su said.

The three new FTZs are based in coastal cities that neigh­bor de­vel­oped re­gions.

They en­joy industrial ad­van­tages due to their rel­a­tive ma­tu­rity and a com­pet­i­tive edge that has been built up in re­cent decades.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.