| The first free trade zone can be traced back to1547when Italy established its free port. For Asia however, the construction of FTZs did not reach maturity until1970s when functions and incidence of FTZs were largely expanded. During that time, FTZs specialising in export processing and entrepot trade mushroomed in Asia. Among them, FTZs in Hong Kong, Taiwan and Singapore turned out successful and to a large extent influenced trade in neighbouring areas and the whole world alike.FTZs in China appeared along with this trend. In1990, Pudong New Area was established by the central government followed by the delineation of three areas:Lujiazui financial&trade area, Jinqiao export processing area and Waigaoqiao bonded area. This was the embryonic form of the Shanghai free trade zone. In2013, China (Shanghai) Pilot Free Trade Zone was established. According to the central government, the experience of Shanghai FTZ should be transferable and duplicable and the main goals of Shanghai FTZ are functional transformation of government, support of investment and innovation activities, financial reform and an investor-friendly regulatory environment.In the past two years, Shanghai FTZ has made great achievements but a lot still needs improving. This also gathers attention from both national and municipal leaders during recent NPC and CPPCC. In this respect, Singapore free port-a global shipping centre and an international financial centre that advocates free trade-poses a good example. Besides, it is quite comparable due to the interventionist approach that the government has adopted since foundation. This paper, first of all, looks into the development path of Singapore free port. It then compares Shanghai free trade zone with Singapore free port, especially focusing on the industrial adjustment of both cities. This leads to the development of an analytical framework on the key success factors of free trade zone construction. On these bases, this paper proposes policy suggestions to Shanghai free trade zone and to all the other free trade zones that are being established and that will be established in China alike.This paper adopts a comparative case-study and policy-analysis approach. In the first part, the development path of Singapore free port is analysed. It is found that the development is mainly divided into five stages:entrepot trade (1819-now), import-substitution (1956-1966), export-oriented industrialisation (1966-1972), industrial upgrade (1972-1989) and economic diversification (1989till now). In the meantime, it is revealed that policies play a key role in the above-mentioned stages as the making and implementation of policies act as joints in the transition of different stages.On these bases, this paper looks into the Shanghai free trade zone, with a focus on the industrial development of the city after1990when the embryonic form of the current free trade zone was established. A comparison of industrial development and policy adjustment of Shanghai free trade zone and Singapore free port helps unravel an analytical framework that leads to success in the construction of free trade zone. The framework includes three key factors, namely policy-driven function positioning, FDI-driven industrial upgrade and area-influencing industrial transformation.The application of this framework reveals some areas that need improving in the establishment of Shanghai free trade zone. This paper proposes therefore that an innovative management model and an enhanced’area-influencing’function are of top priority in the development of Shanghai free trade zone and other free trade zones that are to be established in China alike. |
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