Pudong to pioneer institutional reform

A view of Shanghai's Pudong New Area. According to an implementation plan released on Monday by the State Council, China's Cabinet, Pudong will be provided with more autonomy in the reform of key areas for breakthroughs in opening-up. [Wang Gang/for China Daily]

The newly released plan depicting the development path for Pudong New Area in the next five years will help the area fulfill its role as a pioneer of China's socialist modernization, said experts.

The plan will push Pudong New Area to seek more breakthroughs in terms of institutional reform and opening-up, they said.

General offices of the Central Committee of the Communist Party of China and the State Council, China's Cabinet, released on Monday an implementation plan for Pudong's pilot comprehensive reform between 2023 and 2027.

The plan states the area will be provided with more autonomy in the reform of key areas. Comprising 23 detailed measures, the plan states that Pudong will carry out larger stress tests and explore effective ways for megacity governance.

By extending the reform results to a wider area, Pudong should serve as an important demonstration zone while China grows into a modern socialist country, the plan stated.

Quan Heng, Party secretary of the Shanghai Academy of Social Sciences, said the plan centers on institutional opening-up in Pudong.

"By relaxing foreign entry thresholds for telecommunication services and healthcare in an orderly way, by better aligning the negative list for foreign investment with market entry requirements, and by exploring a digital economy regulation system, we can expect more rules, regulations, standards adopted in Pudong to be in line with internationally accepted ones. These will serve China's goal of building a higher level of open economic system," he said.

The plan focuses on Pudong's strengths in finance, talent, data flows, high-tech industries like biomedicine and artificial intelligence, and urban governance, said Xie Yiqing, associate researcher from the Institute of China Studies at the SASS.

According to the plan, efforts should be made to roll out option products for the technology-heavy STAR Market on the Shanghai Stock Exchange. Asset management companies will be supported to further fine-tune their domestic and foreign capital investment channels. Their businesses related to capital sources, investment methods and capital management should be further optimized.

Meanwhile, more convenient settlements in both renminbi and foreign currencies should be provided for cross-border technology trade. Attempts should be made to use the digital renminbi for trade settlements, e-commerce payments, carbon trading and green power trading, the plan stated.

Sun Lixing, a researcher at the Institute of World Economy of the SASS, said efforts should be made to accelerate innovation in the financial sector, especially at the institutional level. Mature markets show that financial innovation can serve as an effective tool to hedge and diversify risks, he said.

According to the local government work report released by the Shanghai municipal government on Tuesday, the city attracted the regional headquarters of 65 new multinational corporations last year, swelling the total to 956.

Previously released official data showed that Pudong was home to 449 MNC regional headquarters by the end of 2023, 30 of which were set up over the past 12 months.

Companies or institutions with their headquarters in Pudong are encouraged to develop offshore economic and trade activities, the new plan stated.

Wang Zhiyi, a specialist in cross-border finance at the Shanghai United Assets and Equity Exchange, said that offshore economic and trade activities include trade in goods, trade in services and processing trade. The new measures will give full play to the strengths of Shanghai's free trade account, which allows more flexible capital flows for offshore businesses and can both manage risks and seek innovations.

In July 2021, the central authorities released a guideline to support Pudong's high-level reform and opening-up, saying the area should pioneer socialist modernization. In December, a framework plan was released to advance high-level institutional opening-up in China (Shanghai) Pilot Free Trade Zone, which is included in Pudong.