BEIJING -- China has expanded its free trade zone (FTZ) in Shanghai and established 3 new zones with eased investment rules to speed up reforms amid economic hardship.
The new zones and expansion of the Shanghai pilot zone were authorized during the bi-monthly meeting of the National People's Congress on Sunday.
Government approvals will end as a precondition for overseas companies setting up ventures or changing their purpose of business in these zones. Instead the companies only need to file a report to the authorities, according to the meeting.
The adjustment will take effect in March and will last for three years, after which official assessment will decide whether the policy should continue.
The move met market expectations that restriction on foreign capital will be gradually scrapped and marked the latest efforts by the central government to push its reform drive and stimulate the economy.
Policy makers vowed more efforts to reform and open up during a top-level economic policy meeting in the beginning of the month, which means foreign companies can expect more opportunities with widening market access.
China has managed to keep a steady but safe pace in opening its market to global competitors in order to shore up economy and avoid mistakes, which, even if small, could be costly to the world's second largest economy.
But thanks to the FTZs, the country can test opening-up measures with limited risks in small but critical business areas.
Li Wenpu, vice-president of the school of economics of Xiamen University, described the FTZs as a pressure test for reform and said the free trade zones will press ahead further measures including streamlining administration and delegating powers.
The meeting said China will expand the Shanghai FTZ to include the city's commercial and financial center Lujiazui, as well as Jinqiao and Zhangjiang districts.
"The FTZ expansion will help explore new paths and accumulate experience for the country's further and overall reform," said Li Guanghui, vice-president of Chinese Academy of International Trade and Economic Cooperation.
It will test China's reform policies in a broader area and also the feasibility to promote pilot measures in Shanghai to other regions, Li Guanghui added.
Using similar terms, Commerce Minister Gao Hucheng said the expanded Shanghai FTZ will test innovative and opening-up measures including foreign investment management, service sector opening up and more flexible supervision.
The meeting specified the geographic limits of trade zones in Guangdong, Fujian provinces and Tianjin municipality, the establishment of which was announced by the central government earlier this month.
Gao said the three new zones will shoulder distinct responsibilities in the economic opening up.
Li Guanghui said the Guangdong FTA will be centered on Hong Kong and Macao economic integration and benefit the upgrading of China-ASEAN trade. Fujian's trade zone will strengthen ties with Taiwan and the Tianjin FTA will serve to coordinate development among Beijing, Tianjin and Hebei province.
Since the launch of the Shanghai FTZ in September 2013, 27 reform measures concerning foreign investment management, trade supervision and corporate annual reports have been copied and applied in other parts of China.