Business / Economy

FTZ reaches record-breaking milestone

By Wei Tian in Shanghai (China Daily) Updated: 2014-09-30 07:18

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 equal shares of praise and criticism.

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

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

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

Over the past year, more than 12,000 enterprises were registered in the FTZ.

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", said Zhu Min, deputy director of the FTZ management committee.

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

"This is evidence of recognition for the FTZ from both domestic and foreign investors," Zhu said.

According to David Mann, managing director of macro research with Standard Chartered Bank, "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," he added.

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 in the FTZ.

"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," said Steve Huang, CEO of DHL Global Forwarding China.

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