The Sharp End: winter 2013 — getting in the (free-trade) zone in China
By Chunfai (CF) Lui
Thirty years after China began a process of economic reform with the introduction of special economic zones, it is now launching a ground-breaking economic experiment. Inside a new type of free-trade zone, it is attempting to test-run an opening up of its financial system, easing restrictions in foreign and private investment, loosening controls on its currency and permitting markets to set interest rates. The plan is that if this experiment in financial reform succeeds, then it will be replicated in other parts of China. At the official launch of the trial zone, 36 Chinese and foreign companies were granted licences to register. In the two months since then, around 700 companies have registered.
While China continues to attract inward investment, with foreign business looking to capitalise on growth in the Chinese consumer market, it has always been a challenge dealing with the country’s red tape and bureaucracy. The new leadership in China is seeking to overcome these difficulties by easing economic restrictions in a pilot free-trade zone in Shanghai. This is an ambitious project to cut red tape for foreign companies, as the government aims to re-position Shanghai as an international financial centre. At its official launch, commerce minister Gao Hucheng said: ‘The establishment of the Shanghai free-trade zone is a significant move for China to conform to new trends in the global economy and trade.’
The new free-trade zone covers 29km2 (11m2) and combines four existing bonded zones in Waigaoqiao and Yangshan ports and the Pudong airport. While foreign exchange convertibility remains under tight control in China, the new free-trade zone will be given special treatment, with full convertibility of the Renminbi. In particular, foreign exchange connected with capital account (investment inflows and outflows) will be relaxed, which until now has been tightly regulated compared with monies flowing into and out of China for trading purposes. This signals a bold move for China, which has always been wary about foreign exchange speculations on the Renminbi…
If you are registered and logged in to the site, click on the link below to read the rest of the Stephenson Harwood briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Stephenson Harwood
News from The Lawyer
Briefings from Stephenson Harwood
This helpful one-page summary diagram shows the current expected timetable for Great Britain’s passenger rail franchises and concessions.
In Kays Hotels v Barclays Bank, the Commercial Court refused a strike-out application that was based on a bank’s argument that the claim was time-barred.
Analysis from The Lawyer
The Lawyer’s litigation reporter looks at the ongoing saga of the Tchenguiz litigation
‘Exotic’ investors and opportunities for legal work beyond M&A feature in The Lawyer’s high-level roundtable debate on south-east Europe