Govt specifies areas for pilot, new FTZs

China published the geographical perimeters of the expanded free trade zone (FTZ) in Shanghai and three newly established FTZs on Monday, reflecting the government's determination to push progress and reform in the zones, experts said.

The new zones and expansion of the China (Shanghai) Pilot Free Trade Zone were authorized during the bi-monthly meeting of the Standing Committee of the National People's Congress on Sunday and the details were published in a report on news portal xinhuanet.com on Monday.

The report followed a December 12 announcement by the State Council about setting up the three new zones.

A set of eased investment rules concerning government approval for the establishment of new companies in the FTZs were also announced Sunday.

China will expand the Shanghai FTZ to include the city's commercial and financial center Lujiazui, as well as Jinqiao and Zhangjiang districts, the report said.

Sun Yuanxin, an FTZ expert with Shanghai University of Finance and Economics, said the expansion creates new room for broader policy trials, as the newly included areas will feature more functions.

"Lujiazui is crowded with financial institutions. If the financial policies in the original Shanghai FTZ could be implemented in the expanded area, they could have huge potential in terms of financial innovation," Sun told the Global Times Monday. "However, confirmation from the government is needed."

What is allowed in the original Shanghai FTZ should also be allowed in the newly included area, Sun noted.

"The newly added areas of the Shanghai FTZ possess a high value. So we could hardly say only the new areas will benefit from the Shanghai FTZ as there will be mutual benefits," said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation.

The original Shanghai FTZ is seen as focusing primarily on logistics and is too limited in space to finish the task of elevating Shanghai's status to that of a global financial center, Bai noted.

The Shanghai FTZ was launched in September 2013 and was seen as a testing ground for financial reforms, commodities trading and logistics.

The FTZ in South China's Guangdong Province will include a total of 120 square kilometers of land in Nansha district in Guangzhou, Qianhai and Shekou districts in Shenzhen and Hengqin district in Zhuhai.

The area of the Guangdong FTZ has been enlarged from the original plan, especially with the addition of Shekou district, an industrial area and one of China's earliest places to undergo reform and opening-up, Shanghai-based newspaper China Business News reported on Monday.

Bai said the plan included combining two potentially competing areas into one district with two complementary sub-areas.

"Given Qianhai's goal of becoming a financial center, it would be difficult for it to accomplish this task alone. Including Shekou will help Qianhai to absorb the advantages enjoyed by Shekou," Bai told the Global Times Monday.

The area for the FTZs in Tianjin Municipality in North China and Fujian Province in East China will be some 120 square kilometers each, according to the report.