China to launch three new free trade zones in push for greater liberalisation

This picture taken on Sept 24, 2014, shows workers packing goods at a warehouse of TSLP at the China (Shanghai) Pilot Free Trade zone during a media trip. China is to launch three pilot free trade zones (FTZ) in the government's push for greater
This picture taken on Sept 24, 2014, shows workers packing goods at a warehouse of TSLP at the China (Shanghai) Pilot Free Trade zone during a media trip. China is to launch three pilot free trade zones (FTZ) in the government's push for greater liberalisation, the Cabinet decided on Friday according to a report by the China Daily. -- PHOTO: AFP

BEIJING - China is to launch three pilot free trade zones (FTZ) in the government's push for greater liberalisation, the Cabinet decided on Friday according to a report by the China Daily.

The new FTZs will be set up in the southern coastal provinces of Guangdong and Fujian, as well as the northern municipality of Tianjin, according to a decision at an executive meeting of China's State Council, the newspaper said.

The move came a year after the authorities set up the pioneering Shanghai Pilot Free Trade Zone.

The 29 sq km zone on the outskirts of Shanghai - hailed as Beijing's boldest reform in decades - was launched in September 2013 as a test-bed for changes such as currency liberalisation, market-determined interest rates and free trade, Reuters reported.

But progress has been slow and policies vague as the political focus has turned from reform to shoring up growth after the economy experienced a sharp slowdown early this year, leaving foreign companies unsure of investing in the FTZ, Reuters said on the eve of the FTZ's first anniversary in September.

Yet at the Cabinet meeting on Friday, the Shanghai FTZ was praised as having formed "replicable reform experiences", China Daily reported, and the central government has decided to "expand the trial to a greater scope to promote opening-up".

Citing state news agency Xinhua, China Daily said some 12,000 firms have been established in the Shanghai FTZ. Foreign trade in the zone reached 747.5 billion yuan (S$158.26 billion) in its first year of operation, according to Xinhua.

Experts cited by China Daily said, like the Shanghai FTZ, the new zones will be able to give easier market access to foreign companies and also ease financial liberalisation.

In Shanghai FTZ's case, a so-called "negative list" of conditions under which foreign investment is barred was reduced by 26.8 percent to 139 areas in July.