China (Shanghai) Pilot Free-Trade Zone is a free-trade zone launched in Shanghai, on September 29, 2013. Free-Trade Zone is a breakthrough in China’s Economic development. In this zone， Chinese government relieves all the restrictions in international trade. Fro example, a tax-free period of 10 years for the businesses in the area， unrestricted foreign currency exchange and no firewall in the Internet.

Some people assimilate Free-Trade Zone to the “one country, two systems” in China’s economic policy.  Due to the financial crisis in 2008 and continue appreciation in RMB, China’s import trade fell significantly so Chinese government wants to use the Free-Trade Zone as a useful tool to increase the amount of import trade. Within few days Free-Trade zone has made considerable influence on many local companies and banks, and stock prices of these firms doing business have climbed. They can have a easy way to expand their foreign market. Moreover, foreign companies also benefit a lot in the Free-Trade Zone, they don’t need to pay expansive tax in China, which can help them reduce the trade cost.

Free-Trade Zone is a bold idea and now is still remain experimental stage. In my opinion, it is a win-win strategy and will help Shanghai become the Asia financial center in the future.

References:

http://baike.baidu.com/link?url=oO9Bjh_eaByGXdh4v1IP-XixCNVTe4lIyPPZfabCVICCNhZRK0NTGVcZKXXGszIQ2Dnl_cEbb6kW94sa8axrfuoJpd5z0UiTrASlJY-15xmhmvp_Gt3Bv-PRguwSilQZp1OT8oL8Ol2LT5xrkYRNLK

http://online.wsj.com/article/SB10001424052702304795804579100640245613408.html

http://en.wikipedia.org/wiki/China_(Shanghai)_Pilot_Free-Trade_Zone