Impact of Shanghai free trade zone’s reforms on China’s economic growth

Abstract

Using China Shanghai Pilot Free Trade Zone (SPFTZ) as a testing ground, several market-driven reforms are created to lay groundwork for sustainable economic growth. Our study aims to give readers a comprehensive analysis on the advancement of such reforms to date and whether they serve the SPFTZ’s aim of economic liberalization. As China’s GDP is currently in single digit growth, examining the progress of SPFTZ is critical and highly anticipated by global investors. Hence, vigorous secondary data analysis is conducted through a multifaceted and inquisitive research method. To provide a balanced view, information provided by multiple credible sources are cross-referenced. Our results revealed remarkable progress in several reforms, namely Administrative Policies, Negative List (trading sector), Free Trade Account, RMB Internationalization, Forex Management Reforms and Interest Rate Liberalization. However, areas that require room for improvement include processing time for setting up companies and Negative List (financial sector). Processing time could be further reduced by referring to OECD standards whereas vague items in the Negative List could be enhanced before duplication. Nonetheless, these policies possess potential to be duplicated gradually and eventually become a new growth strategy via economic liberalization.