On 29 September 2013, the Chinese government formally established the China (Shanghai) Pilot Free Trade Zone (“SH PFTZ”) in Shanghai, China. How the area will affect businesses in China and throughout Asia is top of mind as multinational corporations and local Chinese companies seek to benefit from more relaxed financial and investment controls. As of mid-October, 36 new companies had set up operations in the SH PFTZ in various sectors covering banking, leasing, logistics, e-commerce and trading.
The establishment of the SH PFTZ has been recognised as a crucial economic reform initiated by China’s new leadership. The ‘pilot experiment’ in Shanghai will include reforms focused on the following areas:
- Financial reform
- Upgrading of customs supervision framework
- Simplification of administrative systems supporting the further opening up of the services sector, and
- Creation of a competitive regulatory and tax environment for businesses.