BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/08
The first full year of operation for the SFTZ, which was established in autumn 2013, has been disappointing for most firms. Deregulation of capital movements is still in midstream; use of the yuan in international transactions other than foreign trade is still forbidden and the deregulation of interest rates for yuan deposits has not proceeded as planned. Nevertheless, the SFTZ has seen reforms that make it easier for firms to deal with the rest of the world. At the end of January, the government agreed to extend certain eased restrictions in the SFTZ to the rest of the country. Their impacts will be limited, however.
Three new Shanghai-style free trade zones (Guangdong, Fujian and Tianjin) were approved last December. These new zones will also facilitate business between mainland China and the rest of the world. The new free trade zones should be operational next month, bringing new competitiveness and dynamism to China’s reform policies and opening up to the world.