“China (Shanghai) Pilot Free Trade Zone”

The launch of the China (Shanghai) Pilot Free Trade Zone at Waigaoqiao, Pudong, Shanghai, on September 29, 2013, was a major reform move in response to China’s new realities. It was aimed at exploring new possibilities for expanding the scope of reform and opening China wider to the outside world, and promoting coordinated development for all regions.

Within a two- to three-year window, the pilot program was, in broad terms, expected to expedite the transformation of government functions, push for the opening of the service sector and foreign investment regulatory reform, encourage the development of a headquarters economy and new types of trade, and speed up RMB capital account convertibility and the opening up of financial services. Its objectives also included developing a mechanism for tariff classification of merchandise, building a support framework that encourages investment and innovation, and fostering a business environment in which international norms and the rule of law are respected. The program sought to create a world-class free trade zone with convenience for investment and trade, full convertibility of currencies, an efficient regulatory mechanism, and an effective legal environment. It could provide fresh ideas for further reform and opening up.

The pilot program would be implemented step by step with adequate attention to risk control in an attempt to develop a framework in line with international norms for investment and trade. Areas of focus were envisioned as follows: • accelerating the transformation of government functions; • opening more areas to foreign investors; • promoting the transformation of trade development approach; • further opening the financial services industry, and encouraging innovation; and • improving legal and institutional arrangements. In addition, work on an appropriate regulatory and taxation framework would also be pursued.