The Shanghai municipal government unveiled the China (Shanghai) Pilot Free Trade Zone on Sunday, which is widely expected to create an efficient market environment for domestic and foreign enterprises in a wide variety of businesses. The move seeks to free up the overloaded administrative approval system and introduce measures to encourage innovation and internationalization.
In three years, the country will build on the experience gleaned from the Shanghai free trade zone, and further reform targets may be set, Dai said. These include, in certain areas, no administrative approval required for company registration, no restrictions in equity ratios and limited disclosure requirements. The cornerstones are the reform of power structures and government transparency, with positive changes in policy coordination, information tracking and effect evaluation.
Since the idea was first broached earlier this year, the FTZ has caught the imagination of the business community because of its promise of changes that will bring new opportunities to domestic and foreign enterprises. It is seen as a bold step in economic reform that will redefine the role of government and further open up the economy to the private sector. Shanghai stands to benefit the most because it is expected to play host to an expanding financial services sector and become a regional hub for trade and commerce.
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