Government mulls revised regulation for free trade zone

The government is mulling a revision of the city's regulation of the China (Shanghai) Pilot Free Trade Zone.

Wu Zuqiang, a member of the finance and economy committee of Shanghai People's Congress, the city's legislative body, said on Thursday that the government will submit a draft of the revised regulation, and the standing committee will likely vote on it after two readings.

Wu said legislators have carried out studies on the issue over the past year and heard opinions from entrepreneurs, scholars and government institutions.

"We were advised that the revised regulation should reflect the central government's strategy to deepen the reform and opening-of the country, the results the free trade zone has achieved through innovation and reform and draw on the most competitive free trade zone regulation in the world," he said.

Over 120 members of the Pudong Association of Returned Overseas Scholars attended a consultation on revision of the regulation on Thursday at the congress and raised their hopes for future development of the free trade zone.

Huang Xiaoguang, China CEO at Australia and New Zealand Banking Group, said the free trade zone currently gives more convenience to goods trade rather than international capital flow.

"The free trade zone should facilitate overseas business merging for example, and this could be done by giving policy preference to companies with a good track record of credit," he said.

Lu Shoufu, founder of Shanghai AQ BioPhama Co, called for lower taxes on investment and reduced red tape on import-export inspection.

Shen Hui, founder of VM Motor, said in a race to attract investors, Shanghai is not in a leading position in China in terms of company tax rates and administrative service for investors, but it could make itself attractive in other ways.

"Lower personal taxes for workers in the free trade zone and more policy benefits for foreign passport holders would be great," he said.

Li Mingdong, a manager in charge of R&D at Phillips, said the government could consider allowing businesses in the free trade zone to employ people from overseas because multinational companies are faced with higher and higher labor costs in China.

Others suggested more punishments for repeated intellectual property right offenders and further convenience in application for permits.

The current regulation was passed on July 25, and since then the total area of the free trade zone has been expanded from 28.78 to 120.72 square kilometers.