Early in October 2013, China will open a new kind of free trade zone in Shanghai. This free trade zone will include 29 square kilometers of Pudong district in Shanghai.
In China, it always has been the government who took the lead in boosting investment and economic growth. However, the new zone seeks to change that tradition by ‘giving investors the tools to create money-making opportunities, instead of handing it over to them like cake.’ Also, the new free trade zone implies that China is gradually moving from ‘a global manufacturing powerhouse’ into a higher-level economic growth model, which is to do more service-based businesses, high technology based research and development, and attract more talented people from different parts of the world.
According to professor Sun from Fudan University in Shanghai, “We must change the approach where the government takes the lead in investment and instead let the market determine demand and where investments should go”. In conclusion, instead of too much government intervention, a more market oriented financial system in this free trade zone may help to create a much healthier financial system throughout China.
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