The first free trade zone in Shanghai was founded in September 2013, followed by the establishment of three new pilot zones last year, namely Tianjin Municipality, Fujian Province and Guangdong Province.
The four pilot free trade zones are now spearheading structural reforms to make it easier to start businesses and grant foreign firms more access, temporarily allowing foreign investors to found wholly-owned enterprises in a number of fields, including iron and steel production and gas station operations, according to the State Council early this week.
More than 20 of the total 51 adjustments involve changes from administrative approval to managerial registration for foreign investment. Also, the wholly foreign owned enterprises are not just limited to service sector but expanding to other sectors, ranging from agriculture to transportation.
In particular, international investors in the Shanghai free trade zone can participate in spot trading of commodities ranging from iron ore and non-ferrous metals to cotton. Zone authorities are expected to allow Chinese households to invest in offshore capital markets in the near future.
Rani Jarkas, Chairman of Cedrus Investments, an investment pioneer with years of financial experience in Asia, said, “Loosened controls on capital and widened access have led to a surge in cross-border transactions in these zones. We expect to see a continuous boom as the reform further develops.”