FTZ Focus Group Quarterly Update - Q1 2014

Published on 2014-06-11

There is not yet enough evidence to judge whether the FTZ is a glimpse into China’s future, but, through a series of events to be announced soon, the newly-established FTZ Focus Group hopes to address many of the questions being raised and become a voice to the FTZ authorities on behalf of the Chamber members.

Article by Dimitris Seirinakis, Consultant at Ince & Co International Law Firm Shanghai Office
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The China (Shanghai) Pilot Free Trade Zone (the “FTZ”) officially declared its opening on 29 September 2013.

Premier Li Keqiang described it as an attempt to “explore a new path and a new mode of opening up to the outside world.” The 28 sq km zone is all about moving to a new model of growth for China. A model that is not as reliant on debt-fuelled, energy-intensive, heavy industry but one that hopes to create conditions which will encourage the financial and service sector companies that are vital to a consumer economy.

Six fields of industry are standing to benefit from the opening of the FTZ: financial services, shipping, business and trade, professional services, cultural, and social services. There is a sense of idealism and adventure attached to the FTZ. The central government is expecting the FTZ to “take the lead in practising international rules, legal norms, government services and operation pattern, and to provide a testing ground and new feasibility mode to deepen reform and opening up across the country.” [Kerry Brown, Shanghai 2020, p.161]

For the world at large too, the establishment of the FTZ could have far-reaching significance. If a recent article in The Economist is to be believed [China loses its allure, 25th January 2014], the establishment of the FTZ may be perfectly timed. Yet, for all the initial high hopes, foreign companies appear frustrated at the lack of detailed regulations that they can begin to implement. China’s policy makers are moving cautiously with some of the bolder promised measures. Part of the problem appears to be how to set up an effective firewall between the FTZ and the wider economy while experiments in the FTZ are carried out.

There is not yet enough evidence to judge whether the FTZ is a glimpse into China’s future, but, through a series of events to be announced soon, the newly-established FTZ Focus Group hopes to address many of the questions being raised and become a voice to the FTZ authorities on behalf of the Chamber members.
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