China unveils reform details in Shanghai FTZ

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China unveils reform details in Shanghai FTZ

(Xinhua) 20:04, September 27, 2013

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China on Friday unveiled the blueprint for the pilot free trade zone (FTZ) in Shanghai with a detailed list of reform tasks, easing restrictions on yuan, investment and trade to spearhead the nation's future reforms.

The wide range of reforms will start as of Sunday when the zone is officially inaugurated.

China aims to lift the zone up to international standards featuring convenient investment and trade, free exchange of currencies, efficient supervision and a sound legal environment after two to three years of tests, according to the detailed plan published on the government website.

"Under the precondition that risk can be controlled, China will create conditions to test yuan convertibility under the capital account, market-set interest rates and cross-border use of the Chinese currency in the zone," the long-anticipated plan said.

The FTZ will allow the market to decide prices of financial institutions' assets, or known as the securitization of those assets, as policymakers hope to catalyze further reforms in the world's second-largest economy through such an experiment.

The plan pledged to establish a foreign exchange management mechanism adaptable to trade and investment reforms in the zone.

Enterprises can try the free cross-border financing while multinationals are encouraged to establish regional or global capital management centers in the zone.

The FTZ will also push for "a full-scale opening" of the financial service sector to eligible private capital and foreign financial institutions.

Foreign companies are permitted to gradually participate in commodities futures trading in the zone.

The zone will also boast easier investment access and greater openness in trade of services, according to the plan, with 18 service sectors open to foreign and private capital from finance, shipping, commerce to culture.

Covering almost 29 square kilometers, the zone will be created modeled on existing free trade businesses in the country's economic hub -- Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone.