Mainland China's ministry of commerce announced on August 22 that the government has approved the establishment of a free trade zone in Shanghai, a step towards economic and financial reform under the new leader of the State Council Li Ke Qiang, according to the Epoch Times.
The proposed free trade zone would encompass 29 square kilometers in the suburb of Shanghai where imports would be given tax free status and quotas would be eliminated.
Analysts said that the free trade zone would be exempt from existing Chinese laws governing trade and would require new provisions that would run against entrenched "interest groups" which dominate China's socialist economy.
Chinese media said that the government will test the free exchange of the yuan in the free trade zone, a goal which the government hopes to implement within China as well as in countries abroad.
Analysts added that the major obstacles for the free trade zone include the government's securities commission and "interest groups" tied to the commission, including state banks, which will be threatened by further financial reform.