Shanghai FTZ signals further reform, opening up (2)

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China has rapidly grown into a global manufacturing power with its entry into the World Trade Organization, but the country remains relatively backward in service industries like financing, shipping, commerce, trade and culture, compared with developed nations, experts said.

Shanghai is leading the country in service industry development and the further opening up of the sector is the best choice for the city, according to Chen.

Experiments in the financial sector in the Shanghai FTZ will be the most important part, such as the marketization of interest rates and exchange rate, and offshore finance, said Xu Quan, deputy head of the Shanghai Municipal Office of Finance Service.

Opening up and innovations are crucial for the financial industry, Xu added.

"The official approval of the Shanghai FTZ marks a new phase in China's reform and opening up," said Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

The FTZ establishment will create a new resource allocation mode with a larger scale of opening up, thus releasing new policy dividends and growth poles, according to Bai.

Since taking office in March, China's new government has announced concrete reform plans, including delegating administrative power to lower levels and easing controls in the financial sector.

The new leadership has vowed to push forward reform and opening up and reduce political power on China's market economy. Premier Li Keqiang said that the market is the creator of social wealth and the source of self-sustaining economic development.

Experiences to be gained from the Shanghai pilot zone are expected to be copied in other parts of the country, according to the MOC.

Long Guoqiang, an expert with the Development Research Center of the State Council, said the pilot area was approved "with a view to national development and a new round of reform and opening up."

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