Will the Shanghai Free Trade Zone Live Up to Its Reputation?
New announcements have been made by the Chinese government regarding the Shanghai Free Trade Zone. The zone, which opened this past Sunday, has been lauded by many as a test run for the potential liberalization of China’s financial and capital markets.
Comparisons have abounded between the Shanghai zone and the special economic zone established in Shenzhen in the 1970s, which paved the way for China to open its borders for manufacturing and industrial investments. However, the Chinese government is taking care to manage the Shanghai Free Trade Zone with caution, using a deliberate and rational mindset to approach any potential reforms.
One step that the government has already taken is the promulgation of a so-called “banned list” of enterprise activities that are forbidden from occurring in the zone, Reuters reports. On the banned list are businesses related to media, publishing, gambling, pornography, or the providing of internet services. Also banned are the building of amusement parks and golf courses. There are some areas that are notably not on the list, such as the exploration of shale gas, where are sure to draw the eyes of foreign investors.