SHANGHAI, Sept 27: China has formally announced detailed plans for a new free-trade zone (FTZ) in Shanghai, touted as the country’s biggest potential economic reform since Deng Xiaoping used a similar zone in Shenzhen to pry open a closed economy to trade in 1978.

In an announcement on Friday from the State Council, or cabinet, China said it will open up its largely sheltered services sector to foreign competition in the zone and use it as a testbed for bold financial reforms, including a convertible yuan and liberalised interest rates. Economists consider both areas key levers for restructuring the world’s second-largest economy and putting it on a more sustainable growth path.

No specific timeline was given for implementing any of the reforms, though these should be carried out within 2-3 years, it said, adding financial liberalisation may depend on adequate risk controls. Chinese state media have cautioned that dramatic financial reforms are unlikely this year.

The zone, formally titled the China (Shanghai) Pilot Free Trade Zone, is slated to open on Sunday.—Reuters