The Shanghai Free-Trade Zone comprises about 2% of Shanghai's Pudong district or less than 0.5% of the greater Shanghai area. Other reports[1] from the SCMP ind

The Shanghai Free-Trade Zone comprises about 2% of Shanghai's Pudong district or less than 0.5% of the greater Shanghai area. Other reports[1] from the SCMP indicate the government may want to make the entire Pudong district a free trade zone if things develop smoothly. Pudong is home to most of Shanghai's finance industry. The FTZ however is centered on the Yangshan Deep Water Port. (Map of the FTZ [2], yellow neighborhoods) The loosening of Internet restrictions around a port gives credibility to the idea that Pudong in general will see more developments like this to come. This is significant because those initiating the plans to expand the FTZ in Shanghai have faced the strongest resistance from China's finance and banking regulators[3]. Most banks in China can not engage in international commerce directly so outside investments usually entail setting up a complex JV with a China based company with terms that strongly favor the embedded players. What's interesting to see here is the government is using the opening up of Internet restrictions as a carrot in part of a larger play to promote economic growth while the opposition is coming from the entrenched players in an industry which otherwise stands to make huge gains by introducing more competition. Framed like that, the situation is very analogous to American cell phone carriers with regards to spectrum control. [1] http://www.scmp.com/business/banking-finance/article/1303462/shanghai-free-trade-zone-may-be-extended-cover-pudong http://www.scmp.com/business/banking-finance/article/1303462... [2] http://www.waigaoqiao.gov.cn/SysAdmin/upfiles/2006-4-27/632817353665707532.jpg http://www.waigaoqiao.gov.cn/SysAdmin/upfiles/2006-4-27/6328... [3] http://www.scmp.com/news/china/article/1282793/li-fought-strong-opposition-shanghai-free-trade-zone-plan http://www.scmp.com/news/china/article/1282793/li-fought-str...