Shanghai, the free-trade zone opened. But without its creator
Shanghai (AsiaNews) - With a solemn ceremony chaired by Minister of Commerce Gao Hucheng, China unveiled yesterday its first Free Trade Zone in the national territory. The area - 29 square kilometers in the Shanghai district - represents a test in view of alleged new liberalisations in the commercial and financial realm of the second-largest economy in the world. Oddly absent was Li Keqiang, the new Prime Minister of China, considered the architect of this experiment.
The precise rules for liberalisation in the area shall be made known only at the end of the year. For now it is known that they cover 18 business sectors ranging from finance to carriage by sea, and especially the currency market: within the area, in fact, interest rates will be regulated by the market and not by the Central Bank of China (as happens in the rest of the country) and free trade will be allowed between the national currency (yuan renminbi) and other currencies.
Inaugurating the complex, the Minister Gao said that "this is a significant move for China, which wants to catch up with new trends in the economy and in global trade". Many analysts believe, however, that it is actually an obligatory move for Beijing, which in 2012 recorded a GDP growth of 7.7%, the worst of the last 13 years. To maintain an economic growth able to keep prices down and employment rates high - and thus, social and political stability - China needs annually to reach at least 8.5% GDP growth.
Wellian Wiranto, who handles the area of strategic investments for Barclays Plc, has some reservations: "The impact of this area will reveal itself over time. They are learning as they go and they are trying to see the impact of the opening up and if its applicable to the rest of the country." To try to "make life comfortable" to foreigners in the area, the government has promised to free the internet from State censorship.
Less comfortable is the situation of Hong Kong, until yesterday the only free port with direct access to the market (and capital) of mainland China. Many residents of the area fear that the opening of the Shanghai Zone could have disastrous impacts on their economic well-being, and for some this is a sort of "pique" of the central authorities for the high level of democracy which Hong Kong does not want to give up.
Yin Zonghua, Director of the International Trade Department of the Chinese Ministry of Commerce, sought to dispel doubts: "Hong Kong has its own advantages that can help it play an important role in the Shanghai free-trade zone. The changes that are happening will only be a benefit to the prosperity and long-term stability of Hong Kong".