China Opens Free Trade Zone in Shanghai
China has turned Shanghai into a free trade zone, as it hopes to open up even more to the west. The new economic zone will make it easier for foreigners to invest money. In addition, the Chinese currency, Yuan, can be traded freely within the zone.
Banks will profit most from the new trading zone because interest rates will not be controlled by the Chinese government. Other free sectors include shipping, travel, insurance and medicine.
China’s government will lift the restriction on the production of certain items, like video games.Foreign companies are now allowed to manufacture game consoles freely, after a 13-year ban. The government has also promised to allow companies to access web sites that have not been accessible in China.
The new free-trade zone is the most important step towards free-market economy since Deng Xiaoping created special economic zones in China in the 1980s. Chinese leaders want to show that the country is willing to move its economy forward, especially in times when growth has slowed down a bit. Economic experts in China hope that the zone will increase investment and provide a new boost for China’s economy.
Government leaders have set up a time frame of three years to see if the new zone succeeds. If so, other free trade areas may follow in other parts of China.
Shanghai, with a population of 20 million, is China’s most important financial centre. The new economic zone is to cover about 30 square kilometres of land around the harbour and the international airport
In the past few months real estate prices have already gone up in the free trade zone. 25 firms have already been allowed to set up operations with more to come. Although Chinese leaders hope to divert business away from Hong Kong, the economy in the former British colony will have nothing to fear. It will remain one of Asia’s biggest financial centres.
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Words
- access = right to use
- accessible =reachable, easy to get into
- allow = let
- boost = here: something that helps you improve or increase the economy
- certain = special
- currency = the money that a country has
- economy = system by which a country’s money and production are controlled
- especially = above all
- foreigner = person who comes from another country
- free-market = economic system in which prices are not controlled by the government
- game console = flat board that has controls you use to play a video game
- government = people who rule a country
- growth = becoming bigger
- in addition = also
- increase = to go up
- insurance = when you pay a company to pay for costs if something bad happens to you
- interest rate = the percentage amount that you have to pay to a bank when you borrow money or the percentage that you get from the bank when you keep money there
- invest =spend, put in
- lift = do away with
- manufacture = produce
- profit = make money
- provide = offer
- restriction = limit, control
- set up = organize, manage
- succeed = here: to get the results that the government wants
- time frame = here: the number of years that the government will watch this project
- trade= to buy and sell products
- willing = want to