Abstract
Together with the deepening of globalization and economic integration, trade and investment liberalization has played more important role in economic cooperation. Besides the free trade agreements among member countries, free trade zone is also considered to establish a favorable environment in order to attract foreign investment and promote economic growth of the areas laying inside and outside the zone. On the basis of economic reforming and trade liberalization initiative, China approved the establishment of Shanghai Pilot free trade zone on September 29th, 2013. The Shanghai Pilot free trade zone is the experiment area of the whole country’s national economic transition process. For the first time, many new policies and management mode were adopted in this area to examine their performance and usability. This study aims to analyze the policy’s effect of Shanghai pilot free trade zone on Shanghai economic growth. By using counter-factual method, the study compares the difference of Shanghai GDP in counter-factual scenario from the actual scenario and figures out the policy effect with the existence of the free trade zone. Therefore, the finding emphasizes the strong effect of Shanghai free trade zone on its economic growth. Understanding the economic effect of Shanghai pilot free trade zone is necessary to further up investment and trade liberalization in China.
Highlights
IntroductionThe Shanghai Pilot Free Trade Zone (or the “Free trade zones (FTZs)”) is located in the Pudong New Area of Shanghai, is the first free trade zone in Chinese mainland
This study aims to analyze the policy’s effect of Shanghai pilot free trade zone on Shanghai economic growth
In 2015 and in 2016, the average effect of Shanghai Free trade zones (FTZs) on it economic growth increased to 15.2% and 22.9 respectively
Summary
The Shanghai Pilot Free Trade Zone (or the “FTZ”) is located in the Pudong New Area of Shanghai, is the first free trade zone in Chinese mainland. The Shanghai FTZ was approved by China’s State Council on 22 August 2013 and was officially launched on 29 September 2013. The Shanghai FTZ covers an area of 28.78 square kilometer and comprises the four existing customs supervisory zones, including Waigaoqiao Bonded Zone, Waigaoqiao Bonded Logistic park, Yangshan Bonded Port and Pudong Airport Comprehensive Bonded Zone. In 2014, it was expanded by incorporating Lujiazui Financial Area, Jinqiao Export Processing Zone, and Zhangjiang High Tech Park, expanding the area of the Free Trade Zone from 28.78 square kilometers to 120.72 square kilometer. The FTZ is expected to facilitate open trade anchored in liberalized provisions on foreign exchange management, tax policies, and customs supervision [1]
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