State Council gave approval Shanghai to become mainland's 1st free-trade zone. The plan behind such decision is to make the city a global financial, trade and shipping hub with the idea to compete other Asian cities such as Hong Kong known for its tax free policy.
The creation of this free-trade zone will be a test for the Chinese Government to make financial reforms to boost local economy. The planned zone will be 28.78 square kilometres in Waigaoqiao, Yangshan and Pudong districts in Shanghai.
Shanghai has all that is needed such as economic strength, good geographical position and political support, to become leader in Asia. The free port zone will allow the flow goods unhindered with 0 tariffs on imports.
It was announced by officials that the he most valuable part of the Shanghai free-trade zone plan is in the financial sector, such as allowing individuals to directly invest into overseas capital markets.