China Continues To Have More Restrictions For Foreign Investments In Shanghai Free-Trade Zone

Shanghai’s local government has announced a series of measures to control foreign investment in its newly-launched Shanghai Free-Trade Zone.


The Shanghai free-trade zone that has been touted as China’s most important attempt at economic Jego_Chinese_messaging_appreform since the establishment of the country’s first special economic zone in 1980 in Shenzhen will come with conditions apply symbol. After dismissing reports that it is relaxing social networking sites like Facebook and Twitter in the Shanghai’s free-trade zone, it has come up with a series of measures to control foreign investment, reports Tech In Asia.

According to the new set of guidelines, the government prohibits,

1. Investment news sites, online audio and video programs, Internet access services business sites, Internet culture operation (except music).

2. Directly or indirectly engage and participate in online game operator services.

3. Investment operating domestic Internet virtual private network services for foreign investment shall not exceed 50%.

4. Investment management Internet data centre services.

To find more detailed information about the government prohibits, click here.

The Shanghai pilot free-trade zone, a nearly 11-sq mile district that covers four existing special trade zones in Pudong district has been launched with the intention to upgrade financial services, promote trade and improve governance as well as measures to encourage foreign investment in 18 sectors in the country’s tightly regulated service industry. However, it doesn’t seem that the zone would provide free access to the foreign companies.

Recently the international press recently went berserk over the news that the Chinese Government is relaxing its clutches over the social networking sites in Shanghai’s free-trade zone. But the news that was backed by the “government sources” and endorsed by one of the top leaders Li Keqiang was later found to be false. Chinese officials stated to People’s Daily that the news reports of unblocking sites were “incorrect” and that there would be no changes to the existing internet policy in the free trade zone.

The unblocking of sites in the free zone was to make foreigners “feel like at home” and could have sent positive signals to the international community but that isn’t happening for now. This has also upset the prospects of China’s three biggest telecoms companies – China Mobile, China Unicom and China Telecom, who have been informed of the decision to allow foreign competition in the free trade zone to bid for regional Internet service license.

Setting up the zone in Shanghai, is being looked upon as a sign of fast economic liberalisation by economists but it seems that it would happen under the supervision of the Chinese government – a government which has been popular for its lack of press and censorship freedom.