外文标题：China launches first FTZ in Shanghai to start wave of reforms
BEIJING: China on Sunday launched a major free trade zone in its commercial hub Shanghai as the the world's second-biggest economy braces for the boldest reform move to liberalise regulations on finance, investment and trade.
The Shanghai FTZ, which covers an area of 29 sqaure km in the gleaming metropolis, is seen as a testing ground for the Communist giant's ability to make structural changes and realign its economic model in the face of slowing growth that currently stabilised around 7.5 per cent GDP.
"The establishment of the Shanghai free trade zone is a significant move for China to conform to new trends in the global economy and trade, and implement a more active opening-up strategy," commerce minister Gao Hucheng said at the launch ceremony.
Making some bold reforms, the government would open up its largely sheltered services sector to foreign competition in the zone and would allow free yuan convertibility under the capital account on a trial basis, the cabinet said on Friday.
China aims to lift the zone, which is expected to pose a stiff competition to international trade hub Hong Kong, 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.
The FTZ will allow the market to decide prices of financial institutions' assets, or known as the securitisation of those assets, as policy-makers hope to catalyse further reforms in China through such an experiment.
The zone was envisaged to test how it could boost FDI and reignite the slowing down of the world's second largest economy, which expanded 7.7 per cent last year, its slowest pace in 13 years.
Chinese banks, which have already opened their branches in the FTZ, were allowed to conduct offshore business, a move further liberalising financial markets. The banks in the FTZ will be permitted to provide services to depositors resident in other countries.
Shanghai FTZ will also allow eligible foreign financial institutions to set up banks, and team up with qualified domestic banks in joint-ventures. If successful, China plans to extend such hubs in different cities.
Rabin Chanda (Kolkata)
While China is marching ahead in all front we the Indian are thinking of communal differences and getting reeled in severe problems.
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Indian exporters, traders and banks should take this oppertunity for doing business
China started experimenting this few years ago, to compete with HongKong, this being the latest move. For eg, none of the Western country people need visa to fly into Shanghai for 3 days on transit etc. I can sense what China wants to do and I really appreciate it. Here in India, govt want to make things more complicated to tourists and everyone else including its population while making things easier only for the politicians!
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J.K.Ahuja (Jabalpur) replies to Overseasobserver
Overseasobserver, to remove your ignorance of geography, I have to inform you that Hong King is a part of China, though it has a different form of government,therefore there is no question of competetion between the different cities of China, including Hong Kong.
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Hope at least next government will help us to compete with China in all fronts (not only in population). to beat china, we should not be concentrating only in service based industries(where we are facing tough competition from other countries) , for a long run we need to concentrate in Manufacturing industries and Agri...
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China with all its drawbacks (as we percieved by us in India) and kind of autocratic rule does lot better than India in such cases. I wonder why we don't do it?
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Very good idea
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Sanatan Issar (Unknown)
Mahesh Kuthuru (Las Vegas)
We need to do same for Indian Cities. MK
Launching of FTZ - I think is a initiative taken by chinese govenrment to overcome the trading problem arises from the international trade currency which are only three- US dollar, Euro and IFC currency. As repeatedly asked by international community specially china to introduce a new currency in international market for trading, at last china has taken a step to overcome that issue which is a hinderance in internatinal trading- International trading currency. also a shift from export orientation economy to service based economy as china economy is already expanded and now they are trying to sustain thier growht by shifting to serivce sector, a move that agian gives open challenge to US economist.
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