Will first gauge the financial impact of the FTZ.
China opened the Shanghai free trade zone on Sunday, a move that some analysts see as an assault on Hong Kong’s standing as Asia’s premier investment hub. Others see the FTZ as China’s boldest financial reform in decades.
Chinese officials gave no details on when specific initiatives at the Shanghai FTZ will be implemented but said most will be introduced in the next three years. The Shanghai FTZ covers an area of nearly 29 sq km on the eastern outskirts of Shanghai.
Its aim is to create a more efficient and open economic system. Commerce Minister Gao Hucheng said the creation of the FTZ was a crucial decision for China's next wave of reform and liberalization. He said the move follows the trend of global economic developments and reflects a more active strategy of liberalization. Citigroup Inc and Bank of China Ltd said they will participate in the FTZ.
Both banks were among the first to announce their participation in the zone. The FTZ will experiment with free-market policies. China will allow trials of renminbi convertibility in capital flows at the FTZ. An international energy center to trade crude futures will also be established at the zone. Premier Li Keqiang and President Xi Jinping are expected to seek support for national plans to reduce government control of the economy and financial system at a Communist Party plenum this November.
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