Will China's new 'free trade zone' live up to the hype?
This picture taken on September 23, 2013 shows laborers covering signage reading 'China (Shanghai) Pilot Free Trade Zone' on a gate of Shanghai Waigaoqiao Free Trade Zone (FTZ) with a piece of cloth, ahead of its formal launch on September 29. China's first free trade zone will allow access to Facebook, Twitter and other websites banned nationwide, in a rare exception to strict Internet controls, a Hong Kong newspaper reported on September 24. The Shanghai free trade zone, approved in August to boost competitiveness, will also lift a 2012 block on The New York Times, the South China Morning Post said, citing unnamed government sources.
This week, the Chinese government will open the country's first 'free trade zone' in Shanghai. It will be an area of deregulation where foreign companies will be able to sell products and services without import duties or taxes. Marketplace's China Bureau Chief Rob Schmitz says the move has those in the foreign buisness community optimistic -- but they know it won't make business in the region a cake walk.
"There is a lot of skepticism because nobody knows the specifics of how exactly this is going to make selling your products easier in China," he says.
Schmitz says China may utilize this free trade zone to give global financial markets a go at determining the value of its currency -- something U.S. lawmakers have been pushing China to do for years to allow American products to better compete with Chinese products. But Schmitz says, don't hold your breath.
"China has always been very, very cautious about loosening control on its currency for fear that it would have a broad, negative impact on its economy."
Marketplace China Bureau Chief Rob Schmitz joins Marketplace host David Brancaccio to discuss.