Free trade zone reaches milestone

On its first anniversary, the China (Shanghai) Pilot Free Trade Zone, which epitomizes China's determination to push forward reform and upgrade its economy, has received both praise and criticism.

Authorities say they are making every effort to create an accommodating and fair market by issuing groundbreaking policies and reducing red tape, which has been applauded by experts and executives.

At the same time, some are complaining that promised innovations have yet to materialize, and that convincing steps to liberalize the financial market are lacking.

But enthusiasm for the zone remains among investors for the 28.78-square-kilometer area in eastern Shanghai.

Over the past year, more than 12,000 businesses have registered in the zone.

In the first eight months of the year, newly registered companies in China increased nearly 11 times year-on-year "much more than we thought", says Zhu Min, deputy director of the zone management committee.

Although Zhu says the number of new registrants has stabilized since May, more than 700 new companies spring up each month on average, among which nearly one-quarter are from overseas.

David Mann, managing director of macro research with Standard Chartered Bank, says: "Encouraging entrepreneurship is a message very clearly being delivered in the FTZ.

"Companies that might face a lot of red tape outside the free trade zone have a lot less trouble inside."

The success of the zone is largely the result of the negative list system, which has been one of the more effective reform measures tested there.

"The Shanghai FTZ encourages a gathering of service and trade companies, which has helped our business in the zone to grow at double-digit speed, and it is still accelerating," says Steve Huang, CEO of DHL Global Forwarding China.

weitian@chinadaily.com.cn

(China Daily European Weekly 10/03/2014 page23)