China unveils rules on first free trade zone in Shanghai
SHANGHAI (AFP) - China has officially unveiled a plan for its first free trade zone in Shanghai, shedding light on Friday on the reform path of the new leadership as it aims to transform the world's second-largest economy.
The government will allow free yuan convertibility under the capital account on a trial basis, and test market-set interest rates and cross-border use of yuan in the zone, according to the plan issued by the State Council, China's Cabinet.
Restrictions on foreign investment will also be eased, as regulations on operations of foreign firms and Sino-foreign joint ventures will be "temporarily adjusted" in the zone for three years from Oct 1, said the plan, which is largely in line with a draft reported by AFP earlier.
"It (the zone) should be made an experimental field to push forward reforms, improve the open economy, as well as accumulate experience that can be duplicated and promoted," the Cabinet said in a statement while announcing the plan. However, it made no mention of a reported plan to liberalise the country's tightly controlled Internet sector in the zone.