Commentary Shanghai 1-2013


PRC to launch Shanghai free trade pilot zone


Following the passage of the Overall Plan for the China (Shanghai) Free Trade Pilot Zone (the “Plan”) on July 3rd, 2013, the State Council, on August 22nd, 2013, formally approved the establishment of Shanghai Free Trade Pilot Zone (the “FTPZ”) in the current Shanghai Integrated Bonded Zone, which covers 

  • The Waigaoqiao Bonded Zone;
  • The Waigaoqiao Logistics Park; 
  • The Pudong Airport Integrated Bonded Zone; and 
  • The Yangshan Free Trade Port Area.

Acting as the test-bed for China’s economic reform policies, the FTPZ is aimed to accelerate the transformation of government function, further open up the service and adapt to global economic and trade development. The framework of favorable regulatory initiatives to be created in the FTPZ can be basically pictured with current public information and press release, despite of the unavailability of access to the particulars of the Plan. The major initiatives involve:

  • Simplification of foreign investment administration
  • Facilitation of trade
  • Favorable tax policies
  • Financial reform.


Various polices that are expected to liberalize the market access, investment procedure, custom supervision, taxation, capital flow etc. in the FTPZ should probably be taken into consideration when making business decisions of locales and business scope. Situation and relocation in FTPZ will make establishment and/or maintenance of business far more economic in terms of time and financial cost. On the other hand, investors can extensively explore the new business opportunities brought by the FTPZ to make their investment in China more flexible, by entering into new sectors or expanding current business scope.


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