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Shanghai Free Trade Zone - Benefits likely outweighed by costs

Comments on  Bo Chen "Pilot free trade zone in Shanghai to build open economy", 20/10/2013, http://www.eastasiaforum.org/2013/10/19/pilot-free-trade-zone-in-shanghai-to-build-open-economy

While there may be some merits in experimenting a FTZ in China and Shanghai is certainly a good place to do it, many in China may equally feel whether it would create another venue of corruption for officials and people in power positions given the rampant and widespread corruption in China including many high level officials who are exposed and the likelihood more are on the way.

China needs not and should not be concerned by the TPP at any time soon. It is unlikely to achieve what the US has been trying to do, given the diversity of its members and the different ability to wear the shocks of the US approach. As a result, there is no need to be fearful of it.
There are better ways in China to further economic reforms than a free trade zone with special policies that are always inevitably taken advantage by people seeking rents to profit from it.
Internal banking and finance reforms to reflect the costs and benefit of finance, deposit and loans and to allow private banking and finance firms to compete and to bring the grey or semi grey banking into open and give those legitimate roles, for example, will go a long way for better resource allocation.
More than 3 decades of economic reforms and open door policies should be ripe enough to see the benefits of widespread and nation wide reforms as opposed to generating differences and fragmenting the national market.
A FTZ is now more likely to serve as a new source of resource misallocation rather than to improve it.

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