Shanghai Free Trade Zone And Open Economic Development

The establishment of Shanghai Free Trade Zone is another historic event for China to deepen reform and expand opening up after the development and opening up of Pudong New Area in 1992.As China’s international economic,financial,trade,shipping,science and technology innovation center,Shanghai naturally undertakes the task of deepening reform,innovation and development.Faced with the current international and domestic situation,the global economy and its governance mechanism have entered a period of deep adjustment,and China’s economy is also facing the challenge of transformation.It is urgent to implement a new round of high-level opening to the outside world to promote reform,development and innovation in order to adapt to the global production layout and the restructuring of the trade rules system.Under this background,Shanghai Free Trade Zone emerged as the times require.Through the high-standard international investment and trade rules and common practices,Shanghai Free Trade Zone took the lead in forming an open,transparent and efficient business environment,and continuously explored new ways and accumulated new experience for the expansion of openness.The establishment of FTZ has abundant theoretical basis.On the basis of sorting out the relevant theories and literature,we can see that there are abundant studies on the institutional innovation summary of FTZ and the impact of FTZ on the economy,while there are few papers focusing on the research of FTZ and the development of open economy.Firstly,this paper differentiates the connotation of open economy development and expounds the influencing factors of open economy development.On this basis,it puts forward the mechanism of the construction of Shanghai Free Trade Zone influencing open economy,namely,institutional incentive mechanism,gross expansion mechanism,open-oriented mechanism and internal and external linking mechanism.The four mechanisms illustrate the relationship between the construction of Shanghai Free Trade Zone and the open economy from different levels.In the empirical analysis,this paper intends to make an empirical study on the impact of the opening economy of the Shanghai Free Trade Zone,which was the earliest one to establish a free trade experimental zone,has a higher level of foreign trade and financial supporting services.Considering that the connotation of open economy development is complex,when studying the development of open economy in Shanghai Free Trade Zone,we first measure the level of open economy development,establish an index system of open economy development,and use principal component analysis to synthesize the index of open economy development,in order to measure the degree of Shanghai’s opening to the outside world.On this basis,the establishment of Shanghai Free Trade Zone as a virtual variable is used to measure its impact by empirical analysis.Finally,the robustness test is carried out by using the synthetic control method,and the key variables are selected to estimate the actual impact of the establishment of the free trade pilot area on the actual utilization of foreign direct investment in Shanghai and the import and export volume of Shanghai.The results show that the establishment of Shanghai FTZ has a significant positive impact on the development of Shanghai’s open economy.This paper holds that the main reason for its positive impact lies in the institutional impact effect of the establishment of FTZ,which accelerates the transformation of government functions.Through deregulation and strengthening market mechanism,resources can be effectively allocated,resulting in the spillover effect of "institutional dividend",thus promoting the open economy development of FTZ.Therefore,the Shanghai Free Trade Zone needs to keep the superiority of system innovation,expand the scope of radiation and demonstration effect,and continue to promote the sustainable development of open economy.In view of the development bottlenecks such as shallow level and homogeneity experiments,insufficient motive force for reform and innovation,insufficient strategic connection with other countries and lack of legal basis,the first is to explore the construction of free trade ports according to the decisions made in the report of the Nineteenth National Congress,to realize the complementary functions of ports,to enhance regional innovation vitality,to further open up and promote the pace of reform;the second is to enhance the development of open economy.Quality promotes the development of modern service industry and moves towards the high-end value chain.Third,we should maintain the advantages of institutional innovation,set up coordination institutions at the national level,and promote the deepening development of reform and innovation.The fourth is the good connection between the "one belt and one road" and the Yangtze River economic belt construction;the fifth is to improve the legislative level of the pilot area,laying the foundation for future development.