Last September, China’s largest and most cosmopolitan city, Shanghai, launched an ambitious new free trade zone. The so-called Shanghai Pilot Free Trade Zone (FTZ) aims to test-run an opening up of its financial system, easing restrictions in foreign and private investment and loosening controls on its currency.
For international and domestic law firms based in the city this means more work relating to foreign investment and financial products.
But the talks among foreign and local lawyers these days are about opportunities of another type. The FTZ has for the first time opened up the possibility of a cooperative mechanism between Chinese and foreign law firms, potentially allowing associations between the two.
More interestingly, a well-placed official of Shanghai Bureau of Justice has indicated that the ultimate goal of the initial FTZ pilot scheme is to allow joint ventures between foreign and domestic firms in the future, citing the Singaporean model as an example.
Some outward-looking Shanghai firms are said to have already expressed their interest in the new scheme. But their foreign counterparts still need more convincing to believe the new proposals are a meaningful step towards further liberalisation.
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