The plans for the new Shanghai Free Trade Zone have been closely read since they were published by the Chinese authorities at the end of last week. Details about the Zone’s operation remain unclear in many respects, although it will potentially create an enclave on Chinese soil where the rules for foreign businesses will look dramatically different. The Zone will genuinely roadtest new modes of liberalisation and regulation in the services sector in particular and with respect to foreign participation in the financial sector, although scaling these things up to a national level would be complex and sensitive and should not be assumed. But is it also a political strategy for a new leadership consolidating its power and choosing its battles?
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