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China eyes more free trade parks to invigorate growth

Updated: Dec 15,2014 4:28 PM     Xinhua

BEIJING — Just more than a year after the successful launch of the China (Shanghai) Pilot Free Trade Zone (FTZ), the government is planning several similar zones to invigorate the faltering economy.

The decision to establish three free trade parks in Guangdong and Fujian provinces, and Tianjin Municipality, was announced after a State Council executive meeting last week in hopes of replicate the Shanghai model’s success.

The new parks will focus on the experimental policies made in the Shanghai zone, but will also be allowed to add new elements according to local conditions, said the statement released after the meeting.

“This means some 70 percent to 80 percent of the plans for the three regions will be identical with those for Shanghai,” said Sun Yuanxin, professor with the Shanghai University of Finance and Economics.

The Shanghai FTZ was launched in September 2013 to test a broad range of economic reforms, including interest rate liberalization and less investment restrictions.

Apart from those experiments, analysts expect the trade park in Guangdong to excel in customs clearance and financial reforms due to its proximity to Hong Kong and Macao. The Fujian park is predicted to have more favorable policies concerning trade with Taiwan, and the Tianjin park will center on financial leasing.

“Differentiated competition will help explore better experiences to serve the national reform and opening-up,” Chen Bo, an expert from Shanghai University of Finance and Economics, said.

Although detailed plans for the three trade parks have not been made public, the market has reacted positively to the news, with stocks related to the concept increasing on Dec 15.

The move came as China’s growth slid to a low not seen since the 2008/2009 global financial crisis in the third quarter, dragged down by a housing slowdown, softening domestic demand and unsteady export.

In a key economic meeting on Dec 11 that set the tone for next year’s economic policies, Chinese leaders stressed the economy still faces many challenges and “relatively big” downward pressures. They pledged to push ahead with further reforms to give new impetus to the economy.

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