Hong Kong’s South China Morning Post reports:
The central government sees Shanghai’s free-trade zone, to be launched this month, as the pioneer on the mainland of wider convertibility of the yuan and freer, market-oriented interest rates. [… ] Beijing has in principle agreed to let the zone, the mainland’s first, take the lead in its long-awaited reform of foreign exchange and interest rates, an internal government document about the zone’s launch shows. [… ] It is understood that Premier Li Keqiang endorsed the plan to launch the free-trade zone in Shanghai rather than in Tianjin or Guangdong, which had also lobbied for the central government’s approval. […] Last month, Beijing gave approval for Shanghai’s free-trade zone, which will span almost 29 square kilometres in the Pudong New Area, including the Waigaoqiao duty-free zone and Yangshan port. [… ] The Post reported yesterday the zone might eventually be expanded to cover the entire 1,210 square kilometre Pudong district if it proves to be a success.
Zone-based experimentation in economic liberalization has been decisive in ratcheting the country forward, so this initiative is highly encouraging. For partisans of Shanghai, the news is doubly welcome. Letting things play out in different places at different speeds is the obvious way to prevent large country inertia bring everything to a halt, and for China this is a uniquely important consideration. It’s dynamic geography for cautious Confucians (and there’s nothing wrong with that).
More from the SCMP on the SFT-zone and ‘Likonomics’ here.