The China (Shanghai) Pilot Free Trade Zone: Background, Developments and Preliminary Assessment of Initial Impacts

The China (Shanghai) Pilot Free Trade Zone (SPFTZ) founded one year ago is a trial for China’s new round of reform and opening out, which has promised liberalization on capital account and trade facilitation as its main objectives. Here we discuss the differences between the SPFTZ and other free trade areas, and the developments of the SPFTZ in the past year. We also make a preliminary assessment of the SPFTZ’s initial impacts, especially of its impact on China’s capital account opening and financial liberalization. It is possible that the successful practice of the SPFTZ and more pilot policies replicated in China will give rise to a more balanced Chinese economy in the following decade.