FTZ to drive Shanghai growth

The Shanghai pilot free trade zone will provide unprecedented breakthrough opportunity next year, Party Secretary Han Zheng said yesterday.

The city will strive to work on a set of policies next year that can be replicated and promoted in China’s other potential free trade zones as part of its reform efforts, Han told Party cadres at the fifth plenary meeting of the 10th Shanghai Municipal Congress of the Communist Party of China which ended yesterday.

“Reform is the top priority of our work next year,” Han said. “The construction of the free trade zone is the place for making breakthroughs. We also hope to accelerate reforms in state-owned enterprises, improve our administrative system, upgrade the urban-rural integration and strengthen efforts on cultural reforms.”

The China (Shanghai) Pilot Free Trade Zone was considered a major milestone this year that underscored China’s commitment to push ahead with reform and opening-up.

It is expected to function as a testing ground for a set of polices, including the negative list approach, which might help to reorient China’s economy to a growth mode.

“The policies provide no privileges but offer a way to expand the opening in the services sector, and explore management, regulation and supervision system that can facilitate trade,” Han said. “All the trials made in the zone must serve the national strategy and benefit the nation’s economic growth.” Han said the focus was regulatory innovation that allowed market forces to play a more decisive role in the economy.

Reform guideline

Earlier this month, Shanghai published a reform guideline, calling for a reduction in government interference in the operation of state-owned enterprises.

The guideline seeks to ensure that the management of state-owned assets will be put under integrated supervision, replacing previous systems with myriads of separate regulations by local supervision commissions.

The meeting yesterday also laid out some key economic growth target for next year.

Shanghai’s gross domestic product is expected to increase 7.5 percent next year, same as the target for this year. “Shanghai should try all means to keep economic growth stable, which paves the way for accelerating reforms and which is in the center of improving people’s livelihood,” Han said.

Shanghai’s economy rose 7.8 percent from a year earlier in the third quarter of this year, up from 7.6 percent in the second quarter. The city generated a total economic output of 1.55 trillion yuan (US$255 billion) in the first nine months, up 7.7 percent year-on-year and above its annual target of 7.5 percent.

According to a ranking released earlier this month by the China Institute of City Competitiveness, Shanghai overtook Hong Kong to become China’s most competitive city, mainly due to the pilot free trade zone.