Where Is the Alchemy? The Experiment of the Shanghai Free Trade Zone in Freeing the Foreign Investment Regime in China

Abstract

The establishment of the Shanghai Pilot Free Trade Zone immediately hit international and domestic headlines. On face value, the free trade zone is a variation to the long-established special economic zones set up by the Chinese government more than three decades ago in order to attract foreign direct investment and promote economic development in China. In substance, the free trade zone is used by China’s new leadership as a more ambitious testing ground for more liberal economic reforms, especially in the financial industry. This article looks not only into these deepening economic reforms but also into the inherent political difficulties and significance of implementing these plans from a law and development perspective.