China's Pilot Free Trade Zone: Shanghai Free Trade Zone and the Potential Future of Free Trade Zones in Mainland China

Abstract

China is the world’s largest exporter and second largest importer. It is the only developing country other than Russia on the list of the world’s top ten exporters. The value of its imports is only about 300 billion USD less than the US’s imports, and over 700 billion USD from the next largest importing country. Despite its tremendous amount of trade, the slowing domestic economy encourages the national government to test new methods of promoting international trade and foreign investment. In 2013, China created the China (Shanghai) Pilot Free Trade Zone to test relaxed trading practices. This article provides an overview of special economic zones and the Shanghai Free Trade Zone. It then analyzes this new free trade zone and its political and economic effects, and offers several suggestions for the future of the Shanghai Free Trade Zone and other potential free trade zones in Mainland China.