Global Economics Monthly: Shanghai FTZ: Harbinger or Red Herring?
October 23, 2013
After focusing on Washington for much of October, all eyes in the global economy will be on Beijing next month as the 18th Central Committee of China’s Communist Party holds its much-anticipated Third Plenum. With China facing weak global demand, a difficult domestic economic rebalancing, and concern that vested interests will delay national-level reforms, many analysts have seized on the recently opened Shanghai free trade zone (FTZ) as a possible sneak preview of a bold new economic reform package to be unveiled at the Third Plenum. Others are decidedly more skeptical, seeing the FTZ as more hype than substance. But however it turns out, the Shanghai experiment illustrates the challenges China’s leadership faces in shifting to a new model of growth and offers valuable insight into how the new team is going about the task.