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Shanghai Free Trade Zone

A 29-square-kilometer area located in the eastern suburbs of Shanghai that has been designated as the "testing ground" for China's major financial, trade and investment liberalization policies. Officially commencing on September 29, 2013, the free trade zone is part of the Chinese government's effort to push ahead with economic reforms with the aim to roll out the successful policies nationwide eventually.

A three-year suspension of several regulations on foreign investment effectively allowing overseas investors to invest as freely as their domestic peers. Foreign companies are allowed to invest in the banking, healthcare insurance, logistics, human resources and tourism sectors through subsidiaries or joint ventures within the free-trade zone. Foreign telecommunications companies are also allowed to bid for licenses to provide internet services within the new special economic zone. An internet ban will be lifted for access to foreign websites, including Facebook, Twitter and The New York Times.

Additional financial reforms will be carried out in the zone, including easing capital controls by allowing full yuan convertibility and removing restrictions on bank interest rates. The free trade zone experiment is designed to rebalance China's economy from manufacturing-based to a consumption and service driven model.

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