I think that is part of modern chinese DNA to get everyday more addicted to new 改革 (gaige means reform). That’s because is important to show to chinese population and to investors from all the world that China can always go ahead into something of new without changing that we could define as social harmony (one of most important fundamentals of confucianism as for communism party and keeping business environment as one of most interesting to develop new ventures.
And in particular each gaige could be more interesting if driven with the same perspective that was used by Deng Xiao Ping in ’78 when he started the glorious 改革开放 – So the news about Shanghai City’s will to introduce Free Trade Zone in municipal area completely match with chinese ambition to drive new area where chinese system can realize his awarness of being real business model and place of opportunities for trading and investments of the same importance like New York or Hong Kong –
Yes, because HK even if is part of Chinese Nation still today represents concretely the perspective of “1 country 2 systems” that has been considered as fundamental to manage the re-entry of HK under chinese political asset and it still maintains one of most profitable condition of Free Trade Environment for goods and direct investments.
From 2008 when Beijing has been protagonist of Olimpic Games, Shanghai has been indicated as new center of the world for economic attraction in particular when SH was choosen as host – city for one of most important EXPO’s editions in the history in 2010. I well remember the perception about being the top of the world when i was working in SH in 2006 – 2007 and then in 2009 – It was like the beginning of new era. But at the same time i remember that even if companies were investing in SH registering their representative office first (then officially with new wofes in particular from 2010 when regulamentation changed in behalf of wofes) HK represented always the best place to invest capital gains and where drive good IDEs and high profit’s financial ventures. Why? Chinese money are chinese.. investors said.. money in HK are our money. They probably were refering about easy access to investiments using fully convertible RMB…
Well according with recent news Shanghai’s request about start of procedure to become FTZ for investments and goods has been approved by State of Council (in particular the issue has been boosted after visit of premier Li Keqiang in the previous days at Pudong district) and it’ll represent an hypothetic step of testing how other municipal zones could in the future get the same condition boosting their operative assets of investment also in behalf. of businesses built in other regions in mainland. SH will start to compete with HK on this issue and the big internal market and the well framed facilities system already improved for Expo will make for sure the difference and it’ll be really important comparing with HK. We should also to remind that SH got more productive and industrial zones (Ningbo area and others) comparing with Hong Kong but for sure the general tax conditions in HK still represent a very good appeal for investors.
I’m sure that this condition will start new era for chinese investments environment and again it’ll show to the “old continent” how we have to work hard on promote good network and common system also for attraction of IDE in particular towards that fields that we would be proud of holding primacy.