China opens free trade zone in Shanghai

China has launched a major free trade zone in its commercial hub of Shanghai. The zone is being seen as a testing ground for economic reforms in the country. The zone, which covers 29 square kilometers (11 square miles) and takes in four existing special trade zones in Shanghai, was opened at a ceremony in the city on Sunday. It is intended to act as a laboratory for financial experiments that could later be implemented elsewhere in China. "The establishment of the Shanghai free trade zone is a significant move for China to conform to new trends in the global economy and trade, and implement a more active opening-up strategy," Commerce Minister Gao Hucheng, who attended the ceremony, said in a statement. The project, whose rules were unveiled by the State Council on Friday, will allow more open trade in services, permitting foreign and private investment in 18 service sectors including finance, shipping, commerce and culture. It will also liberalize foreign currency exchange and try out market-set interest rates, which are seen by analysts as key in reforming China's economy. The newspaper Oriental Morning Post said several financial companies, including US-based Citibank and China's "big four" state-owned banks, would open branches in the zone. The paper also reported that international firms, including Microsoft and Porsche, were involved in investment projects there. The project is a major part of Shanghai's drive to make itself an international financial center by 2020, and comes as China's ruling Communist Party tries to shift the country away from its long reliance on investments and exports, and more towards consumer demand.