China to Set More Free-Trade Zones

BEIJING--China has formally approved plans to set up three more free trade zones in a trial program intended to pave the way for liberalization of the country's financial sector.

The Communist Party's powerful Politburo approved the plan for the three zones in Guangdong and Fujian provinces in the south and the big northern municipality of Tianjin, the official Xinhua News Agency said on Tuesday.

The three new zones will join their counterpart in Shanghai, which was opened with much fanfare in September 2013 but has so far failed to convince many foreign companies that it has ushered in an era of more liberalized investment rules.

An annual survey of more than 370 members of the American Chamber of Commerce in Shanghai released this month found that almost three-quarters of the respondents believed the China (Shanghai) Pilot Free Trade Zone offered no tangible benefits for their business. Around half said they hadn't noticed any change.

Chinese authorities rolled out what they called a "negative list" of investment guidelines--essentially allowing foreign companies to invest in any sector that doesn't specifically bar them. But its list of negatives was so long that many foreign companies were disappointed.

Chinese officials have said that the Shanghai free trade zone has simplified foreign-exchange procedures and made it easier for companies operating in the zone to borrow funds offshore. It has also allowed Microsoft Corp. and Sony Corp. to offer videogame consoles in China for the first time in more than a decade.

Officials maintain that more liberalization lies ahead as China moves gradually toward an easing of its foreign exchange control regime, which limits currency conversions.

The Xinhua report didn't give any fresh details on the regulations covering the three new zones.

Grace Zhu contributed to this article.

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