City plans steps to transform free trade zone into free port
Shanghai-related stocks advanced on Friday as the city's Party chief confirmed plans to reinvent its pilot free trade zone as a world-class free port.
The port has entered the "planning stage" and needs to get the green light from the central authorities before moving forward, said Han Zheng on the sidelines of the 19th National Congress of the Communist Party of China.
The plan, which aims to deepen reform and further open up the economy, has sparked a boom in shares that are port and transportation-related or with Shanghai in their names.
Shanghai Waigaoqiao Free Trade Zone Group Co and Shanghai International Port Group Co Ltd were among the stocks that jumped by the daily limit of 10 percent.
In May, Beijing approved a plan to comprehensively expand the opening-up of the China (Shanghai) Pilot Free Trade Zone, which, according to Han, marked the '3.0 version' of the FTZ since its debut in 2013 and first expansion two years ago.
"System innovation is the core task of the zone," he said. "More than 100 innovative institutions have been applied across the nation through these years."
Experts said such an ambition would be accompanied by plans to further relax import cargo controls and streamline customs clearance in accordance with international practice.
"The prospective free trade port is likely to test the waters for trade facilitation measures and provide policy support to the high-tech sector," according to Sun Yuanxin, deputy director of the Research Institute for the Shanghai FTZ at the Shanghai University of Finance and Economics.
"Free trade port means beyond the current model of bonded areas," said Zhu Min, deputy director of Shanghai Municipal Development and Reform Commission. "It will take about three to four years to redesign a comprehensive set of rules and revise related regulations."
Shanghai's FTZ has become a growth engine, contributing to a quarter of the city's economic output this year, said Weng Zuliang, Party secretary of Shanghai's Pudong New Area.
A total of 49,000 newly established enterprises, 20 percent of which are foreign capital-backed, have set foot in the zone by August, exceeding the number of companies registered in the previous two decades, Weng said.
Earlier this year, the Ministry of Commerce announced the launch of an additional seven free trade zones to accelerate the nation's opening-up and boost the Belt and Road Initiative, taking the number of FTZs to 11.