FTZ mistakes part of learning process
Print Edition
The pilot free trade zone in Shanghai should be allowed to make mistakes as it carries out experimental policies, Long Guoqiang, a senior researcher with a Chinese government think tank, said yesterday.
The Shanghai FTZ paves the way for “upgrading China’s economy,” a concept championed by Premier Li Keqiang, said Long of the State Council’s Development Research Center. Long asked for tolerance and patience for the FTZ, a month-old testing bed for reforms.
The zone will open up broader space in markets for foreign investors, including in the service and financial sectors.
“We should not be afraid of making mistakes in the FTZ. When problems occur, we solve them and then improve our policies. That is the reason why we need pilot zones,” said Long.
The Shanghai FTZ has adopted a “negative list” approach, identifying industries which are banned or have restrictions on foreign investment. The Shanghai government published a list of over 1,000 banned and restricted areas, which include gambling, pornography, weaponry, media, investment banks and insurance.
Some investors complained that the list was too long. However, Long noted that since China is new to the negative list approach, it is natural to have a relatively long list.
“We have implemented the ‘positive list’ approach, which relies on tight control, for decades. It is not easy to roll out a brief negative list overnight, as every item on the list demands careful consideration,” Long added. However, the use of the negative list embodies a “revolutionary” change in ideas for governance, and is conducive to unleashing innovative spirit and vitality in the market, he said.
The list of restrictions planned for the Shanghai FTZ is preliminary and will be shortened, Mayor Yang Xiong told a press conference on Monday.
Long also stressed that the Shanghai FTZ is not a competitor to Hong Kong. Shanghai is tilted toward the domestic market, while Hong Kong stands as an international financial hub. There is no direct competition between the two. Hong Kong will gain more opportunities for development, he added.
The provinces of Guangdong and Hubei and the northern port city of Tianjin reportedly are keen to have their own FTZs.
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